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A Panel Study of Firm Growth among SMEs in Networks

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  • Havnes, Pers-Anders
  • Senneseth, Knut
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    Abstract

    An underlying assumption in SME literature, as well as among policymakers, is that networks are good per se especially for SMEs. Through accessing and utilising external resources in the network, the SME can overcome some of the assumed disadvantages of limited size. Thus networking is assumed to enhance small firm performance and thereby small firm growth. This article investigates this assumption. Analysis of panel data ascertains that a substantial number of SMEs are actively networking and that the level of networking has been maintained over a five-year period. In spite of this there is no evidence of associated short-term benefits such as growth in employment or growth in total sales resulting from the networking activities. The analyses suggest, however, that networking is associated with high growth in the geographic extension of markets, which suggests that networking sustains long-term objectives of the firms. Copyright 2001 by Kluwer Academic Publishers

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    Bibliographic Info

    Article provided by Springer in its journal Small Business Economics.

    Volume (Year): 16 (2001)
    Issue (Month): 4 (June)
    Pages: 293-302

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    Handle: RePEc:kap:sbusec:v:16:y:2001:i:4:p:293-302

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    Cited by:
    1. André van Stel & Roy Thurik & Sander Wennekers & Martin Carree, 2010. "The relationship between entrepreneurship and economic development: is it U-shaped?," Scales Research Reports H200824, EIM Business and Policy Research.
    2. Bilitis Schoonjans & Philippe Cauwenberge & Heidi Bauwhede, 2013. "Formal business networking and SME growth," Small Business Economics, Springer, vol. 41(1), pages 169-181, June.
    3. Eberhard, Manuel & Craig, Justin, 2013. "The evolving role of organisational and personal networks in international market venturing," Journal of World Business, Elsevier, vol. 48(3), pages 385-397.
    4. Dai, Ou & Liu, Xiaohui, 2009. "Returnee entrepreneurs and firm performance in Chinese high-technology industries," International Business Review, Elsevier, vol. 18(4), pages 373-386, August.
    5. Schwartz Dafna & Bar-El Raphael & Malul Miki, 2008. "A Joint Virtual Advanced Technology Incubator - A New Pattern of Israeli-Palestinian Economic Cooperation," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 14(2), pages 1-19, July.
    6. Jack, Sarah L., 2010. "Approaches to studying networks: Implications and outcomes," Journal of Business Venturing, Elsevier, vol. 25(1), pages 120-137, January.
    7. Watson, John, 2007. "Modeling the relationship between networking and firm performance," Journal of Business Venturing, Elsevier, vol. 22(6), pages 852-874, November.
    8. Parker, Simon C., 2008. "The economics of formal business networks," Journal of Business Venturing, Elsevier, vol. 23(6), pages 627-640, November.
    9. Joris Knoben, 2006. "A Relational Account of the Causes of Spatial Firm Mobility," ERSA conference papers ersa06p1, European Regional Science Association.
    10. Dafna Schwartz & Raphael Bar-El, 2006. "Venture Investments in Israel - A Regional Perspective Dafna Schwartz and Raphael Bar-El Ben-Gurion University, School of Management, Israel," ERSA conference papers ersa06p868, European Regional Science Association.
    11. Stanley Nollen & N.S. Siddharthan, 2008. "Factors Influencing the Performance of Indian and Chinese Software Firms," Working Papers id:1584, eSocialSciences.
    12. Dan Kaufmann & Dafna Schwartz, 2009. "Networking strategies of young biotechnology firms in Israel," The Annals of Regional Science, Springer, vol. 43(3), pages 599-613, September.
    13. Manolova, Tatiana S. & Manev, Ivan M. & Gyoshev, Bojidar S., 2010. "In good company: The role of personal and inter-firm networks for new-venture internationalization in a transition economy," Journal of World Business, Elsevier, vol. 45(3), pages 257-265, July.
    14. Joana Almodovar & Aurora Amélia Castro Teixeira, 2004. "Regional innovation networks evolution and firm performance: one or two way causality?," ERSA conference papers ersa04p88, European Regional Science Association.
    15. Catarina Roseira & Carla Ramos & Francisco Maia, 2014. "Understanding Incubator Value – A Network Approach to University Incubators," FEP Working Papers 532, Universidade do Porto, Faculdade de Economia do Porto.
    16. N.S. Siddharthan & Stanley Nollen, 2006. "Non-equity Alliances and the Performance of Indian Software Firms," Working Papers id:544, eSocialSciences.

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