Entrepreneurial Networks, Entrepreneurial Orientation, and Performance of Small and Medium Enterprises: Are Dynamic Capabilities the Missing Link?

Abstract

Performance of small and medium enterprises (SMEs) has been addressed widely in the literature. Developed and developing both the countries are highly concerned about the growth and performance of small and medium enterprises. The literature over the performance is abundant, however, has certain controversies. To identify the reasons behind those controversies, this study has been conducted. the aim of the study was to identify the mediating role of dynamic capabilities which are developed by the entrepreneurial networks and entrepreneurial orientation. The study collected the data from those small and medium enterprises which were connected through a closed network and were the part of groups. The data was collected with the help of adopted questionnaire. 100 small and medium enterprises were contacted for the collection of data. The sample firms were chosen on purposive sampling basis. Structural equation modelling was applied to identify the direct impacts and the mediating impact. The findings identified that among the chosen firms, entrepreneurial networking has an insignificant impact, however, entrepreneurial orientation has shown a significant positive impact. Furthermore, the mediating role of dynamic capabilities was significant in both the relationships. The findings suggested that the sector should develop strong networks and should consider strategic alliances to gain competitive edge. Future researchers are guided to implement the same framework along with the dimensions of the variable.

The efficacy of entrepreneurial networking and innovation in fostering the performance of small businesses: A global south perspective

“…However, concrete evidence is still missing in literature as contrasting ndings are reported. For instance, positive results (Pratono 2018;Wang and Chung 2020;Al-Omoush et al, 2022) and negative ndings (Abu-Rumman et al, 2021;Ribeiro et al, 2021) have been reported in past literature. Therefore, a debate exists in the literature as to which types of networks yield bene ts to rm performance.…”

“…Small businesses utilize both their formal and informal networks to acquire resources (Mayanja et al, 2019), grow their markets (Zheng et al, 2020), as well as transact with other stakeholders like suppliers and creditors, which boosts their performance (Surangi, 2018). Several scholars (Pratono 2018;Anwar and Ali Shah, 2020;Abu-Rumman et al, 2021) have investigated the relationship between business networking and rm performance. However, concrete evidence is still missing in literature as contrasting ndings are reported.…”

“…The networks could be both formal and informal through which small businesses generate resources that are patent to their performance (Mayanja et al, 2019). As business managers or owners establish social ties with both internal and external stakeholders, rm trust increases, and this subsequently advances knowledge sharing and increases the possibility for better rm performance (Abu-Rumman et al, 2021). The interconnectedness of small rms with other institutions and individuals in the form of collaborations, social contacts, and partnerships facilitate knowledge exchange, redesign traditional practices, and improves services, which ultimately improves performance (Cárdenas 2021).Small businesses utilize both their formal and informal networks to acquire resources (Mayanja et al, 2019), grow their markets (Zheng et al, 2020), as well as transact with other stakeholders like suppliers and creditors, which boosts their performance (Surangi, 2018).…”

“…The interconnectedness of small rms with other institutions and individuals in the form of collaborations, social contacts, and partnerships facilitate knowledge exchange, redesign traditional practices, and improves services, which ultimately improves performance (Cárdenas 2021).Small businesses utilize both their formal and informal networks to acquire resources (Mayanja et al, 2019), grow their markets (Zheng et al, 2020), as well as transact with other stakeholders like suppliers and creditors, which boosts their performance (Surangi, 2018). Several scholars (Pratono 2018;Anwar and Ali Shah, 2020;Abu-Rumman et al, 2021) have investigated the relationship between business networking and rm performance. However, concrete evidence is still missing in literature as contrasting ndings are reported.…”

Entrepreneurial networks, geographical proximity, and their relationship to firm growth: a study of 241 small high-tech firms

“…Entrepreneurial networks are strategic tools in achieving firm performance, and several scholars have studied the importance of networking, connections, and firm success (Abu-Rumman et al, 2020 ; Baum et al, 2000 ; Chu & Yoon, 2021 ; Daneil, 2010 ; Kalm, 2012 ; Karami & Tang, 2019 ; Madzimure, 2019 ; Raza et al, 2018 ; Rubino & Vitolla, 2018 ; Wang & Fang, 2021 ). The importance of entrepreneurial start-ups’ resources regarding networks is also recognized (Coviello, 2006 ; Hite & Hesterly, 2001 ).…”