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Operation of Business Supporting Networks: Evidence from an EU Candidate Country

Author

Listed:
  • Vello Vensel

    (Department of Economics at Tallinn University of Technology)

Abstract

Business firms operate in a certain environment in which they interact with one another, with individuals, governmental organizations, financial institutions and various other interest groups. Operation of respective social networks (both voluntary and private market-determined) may have an important effect to the overall business environment. This paper presents and analyses some results of the special sample survey of Estonian firms undertaken in 1994-2000. Our main attention in this paper is paid to business supporting services provided by various institutions and to the operation of disputesí resolution mechanism, using social networks concept ñ other related issues see Vensel and Wihlborg (2001). It is argued that the state enforcement mechanism is working weekly in the still unstable legal environment and firms have to use different self-enforcement mechanisms (through social networks) to resolve disputes. Social networks are also used for obtaining additional financing of the business. The success of the operation of social networks depends on the government economic policy.

Suggested Citation

  • Vello Vensel, 2004. "Operation of Business Supporting Networks: Evidence from an EU Candidate Country," Working Papers 117, Tallinn School of Economics and Business Administration, Tallinn University of Technology.
    • Handle: RePEc:ttu:wpaper:117
    Note: Financial support from the Estonian Science Foundation (Project 5185) for carrying out sample surveys in Estonia is greatly acknowledged by the author.
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    More about this item

    Keywords

    social networks; social capital; trust; business supporting services; disputes resolution mechanism; value creation; enforcement mechanism.;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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