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The Role of Networks in Small and Medium‐Sized Enterprise Innovation and Firm Performance

Author

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  • Sarel Gronum
  • Martie‐louise Verreynne
  • Tim Kastelle

Abstract

The objective of this paper is to understand the contribution of networks to innovation and firm performance in small and medium enterprises (SMEs). Based on longitudinal data from 1,435 SMEs, we show that strong, heterogeneous ties improve innovation in SMEs. However, the connections between network ties and firm performance are more complex than previously thought, as the positive association is mediated by innovation. Consequently, SMEs should only concentrate on cultivating and maintaining networks if they lead directly to improvements in innovation.

Suggested Citation

  • Sarel Gronum & Martie‐louise Verreynne & Tim Kastelle, 2012. "The Role of Networks in Small and Medium‐Sized Enterprise Innovation and Firm Performance," Journal of Small Business Management, Taylor & Francis Journals, vol. 50(2), pages 257-282, April.
  • Handle: RePEc:taf:ujbmxx:v:50:y:2012:i:2:p:257-282
    DOI: 10.1111/j.1540-627X.2012.00353.x
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    Cited by:

    1. Brea, Edgar & Ford, Jerad A., 2023. "No silver bullet: Cognitive technology does not lead to novelty in all firms," Technovation, Elsevier, vol. 122(C).
    2. Nguyen, Tam & Verreynne, Martie-Louise & Steen, John & Torres de Oliveira, Rui, 2023. "Government support versus international knowledge: Investigating innovations from emerging-market small and medium enterprises," Journal of Business Research, Elsevier, vol. 154(C).
    3. Espasandín-Bustelo, Francisco & Rufino-Rus, José Ignacio & Rodríguez-Serrano, M. Ángeles, 2023. "Innovation and performance in social economy enterprises: The mediating effect of legitimacy for customers," Journal of Business Research, Elsevier, vol. 158(C).
    4. Cisneros, Luis & Deschamps, Bérangère & Chirita, Gabriel M. & Geindre, Sébastien, 2022. "Successful family firm succession: Transferring external social capital to a shared-leadership team of siblings," Journal of Family Business Strategy, Elsevier, vol. 13(3).
    5. Hugo Pinto & Jorge André Guerreiro & Manuel Fernández-Esquinas, 2023. "Sources of knowledge in the firm: a review on influential, internal and contextual factors in innovation dynamics," SN Business & Economics, Springer, vol. 3(2), pages 1-32, February.
    6. Nicola Del Sarto & Giulio Ferrigno & Vinit Parida & Alberto Minin, 2023. "Do start-ups benefit from coworking spaces? An empirical analysis of accelerators’ programs," Review of Managerial Science, Springer, vol. 17(7), pages 2471-2502, October.
    7. Ma, Yonghong & Li, Baoxiang, 2022. "Effect of digitalization on knowledge transfer from universities to enterprises: Evidence from postdoctoral workstation of Chinese enterprises," Technology in Society, Elsevier, vol. 71(C).

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