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Contemporary Financial Risk Management Perceptions and Practices of Small-Sized Chinese Businesses

Contemporary Financial Risk Management Perceptions and Practices of Small-Sized Chinese Businesses
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Author(s): Simon S. Gao (Edinburgh Napier University, Scotland), Serge Oreal (ESC Rennes School of Business, France)and Jane Zhang (Edinburgh Napier University, Scotland)
Copyright: 2018
Pages: 15
Source title: Global Business Expansion: Concepts, Methodologies, Tools, and Applications
Source Author(s)/Editor(s): Information Resources Management Association (USA)
DOI: 10.4018/978-1-5225-5481-3.ch041

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Abstract

This study investigated the current perceptions and practices of financial risk management at small businesses in China. The researchers took an interpretative approach, using interviews within a case study, to collect qualitative data from Chinese business owners. Despite the well-documented importance of financial risk management in light of the 2008 global financial crises, surprisingly, the data indicated that little progress has been made on implementing an effective financial risk management in many Chinese small businesses. Analysis indicated the core problems in the case study organization stemmed from a lack of expertise, along with insufficient operational resources, for applying risk management. Interestingly, the researchers also found that Chinese small business managers perceived financial risks differently from managers of large organizations in China. Specifically, small business owners preferred to utilize risk transfer and insurance cover to hedge against financial risk.

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