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Protecting the survival of local SMEs during rapid tourism growth: ongoing lessons from Macao

Protecting the survival of local SMEs during rapid tourism growth: ongoing lessons from Macao PurposeThe purpose of this paper is to investigate how rapid tourism growth in Macao affected local small and medium-sized enterprises (SMEs). The liberalization of the gaming industry to multinational corporations (MNCs) in 2002 led to a sevenfold increase in foreign direct investments (FDI) in Macao.Design/methodology/approachA survey grounded in issues concerning how SMEs adapt to the effects of FDI in Macao was carried out by interviewing managers of local SMEs, MNCs and an SME association. Information from various published sources was also consulted to complement and update the analyses.FindingsFindings revealed that the emergence of investments by MNCs in Macao brought favorable and unfavorable effects to local SMEs. Local SMEs were challenged in terms of recruiting and retaining human resources, given the attractive salaries and training offered by MNCs. Equally challenging for local SMEs was the effect of economic growth on the costs of property space in Macao’s small territory. However, local SMEs have advantages when collaborating with MNCs as the former serves as important partners in networking. Local SMEs can collaborate quicker with their network of local stakeholders which MNCs lack and need. The government and various stakeholders will need to continue their role in developing the capacities and capabilities of local SMEs.Research limitations/implicationsThe research study has important public policy implications on structuring the foreign labor and property needs of local SMEs.Originality/valueThis paper provides insights on the challenges SMEs in small-open economies experience during rapid tourism growth fueled by MNCs, and some policy recommendations are proposed. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Worldwide Hospitality and Tourism Themes Emerald Publishing

Protecting the survival of local SMEs during rapid tourism growth: ongoing lessons from Macao

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1755-4217
DOI
10.1108/WHATT-02-2017-0009
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to investigate how rapid tourism growth in Macao affected local small and medium-sized enterprises (SMEs). The liberalization of the gaming industry to multinational corporations (MNCs) in 2002 led to a sevenfold increase in foreign direct investments (FDI) in Macao.Design/methodology/approachA survey grounded in issues concerning how SMEs adapt to the effects of FDI in Macao was carried out by interviewing managers of local SMEs, MNCs and an SME association. Information from various published sources was also consulted to complement and update the analyses.FindingsFindings revealed that the emergence of investments by MNCs in Macao brought favorable and unfavorable effects to local SMEs. Local SMEs were challenged in terms of recruiting and retaining human resources, given the attractive salaries and training offered by MNCs. Equally challenging for local SMEs was the effect of economic growth on the costs of property space in Macao’s small territory. However, local SMEs have advantages when collaborating with MNCs as the former serves as important partners in networking. Local SMEs can collaborate quicker with their network of local stakeholders which MNCs lack and need. The government and various stakeholders will need to continue their role in developing the capacities and capabilities of local SMEs.Research limitations/implicationsThe research study has important public policy implications on structuring the foreign labor and property needs of local SMEs.Originality/valueThis paper provides insights on the challenges SMEs in small-open economies experience during rapid tourism growth fueled by MNCs, and some policy recommendations are proposed.

Journal

Worldwide Hospitality and Tourism ThemesEmerald Publishing

Published: Jun 12, 2017

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