Risk and return characteristics of small and medium-sized firms by national investment

This study shows that for small and medium-sized enterprises the market price of risk decreases along with the degree of market saturation. Enterprises operating in saturated markets are thus characterized by low risk premiums and high basic yields. It is the reverse for enterprises operating in largely unsaturated markets. A comparison of yield and risk structures between enterprises investing at a supraregional level and those investing regionally shows that firms investing beyond their own region not only have a substantially higher basic yield but also run relatively lower risks.