SME'S SUPPORT AND REGIONAL POLICY IN EU - THE NORTE-LITORAL PORTUGUESE EXPERIENCE

• What are the effects of SME-CI in terms of industrial policy objectives? What instruments
of regional policy does the evidence put forward by these effects?

3.2 SME competitive behaviour

To address these questions we develop, in this point, an empirical analysis of 106
dossiers of investment projects effectively supported by the SME-CI ‘competitiveness
measure’ in Norte-Litoral, most of them belonging to the local productive systems of
the sub-region. Small firms (less than 50 employees) are predominant in total and in
each branch. Traditional ‘low tech’ industries are strongly represented, following the
industrial regional structure, although other industries, like chemicals and machinery,
also have a significant presence.

In order to investigate the strategies addressed by firms we used exploratory statistical
techniques to analyse firms characteristics, strategy direction and the application’s
investment profile. As a result of this exploratory analysis, and taking into account the
theoretical framework, we selected variables that have a clear association with
operational competitive strategies to perform a cluster analysis. Given the fact that
cluster analysis extracts groups of similar attributes, regardless of grouping rationale,
the definition of the set of variables that identify the ‘emergent strategy’ of the firm
(Mintzberg et al, 1998; Campbell-Hunt, 2000) is of core importance. Several
specifications and cluster algorithms were tested in order to achieve robust and
meaningful results, both theoretically and statistically. The retained set of variables
refers to competitiveness investment, taking into account four operational dimensions of
strategies, namely efficiency, client’s satisfaction, innovation and quality (Hill and
Jones, 1995) and a theoretical distinction between static and dynamic competitive
factors.

We define as static factors the investment in modernisation of productive equipment
and logistic infrastructure (IPROD2), and as dynamic factors the investment in new
input economies (INPUT2), management modernisation (GEST2), client’s satisfaction
(SATIS2), quality systems (QUALI2) and R&D activities (RD2).

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