2.1 Introduction 2.2 Definition of the Concepts of SMEs There are special criteria to differentiate SMEs from other companies in the European Union. In the European Union, a medium sized enterprise is a company with fewer than 250 employees while a small sized enterprise is one with less than employees, and the annual turnover of the enterprises should be less than €50 million (EU Commission, 2003). In the United States, there is no distinctive way to identify SME, and typically it depends on the industry in which it competes (Phukan and Dhillon, 2000). Relative to the enterprises that dominate the industry, other companies are generally looked as SMEs in the Untied States. As a developing country with the special political, economic and market environment, SMEs are also defined differently in China. According to the Law of Chinese Small and Medium Sized Enterprises published in 2002, the criteria of the number of employees, sales revenues and total assets are used to define SMEs based on the different industries in China. Although the criteria to define SMEs are different in the different industries, SMEs in China can be generally defined as the enterprises with less than 2000 employees, less than RMB 30 million annual sales revenues and less than RMB 150 million total assets (Law of Chinese Small and Medium Sized Enterprises, 2002 ). 2.2.2 Theories that Explain SMEs |
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