Paper info: Effect of Political Actors on Small Firms' Business Relationships and Performance-A Case of EU and Swedish Small Firms
Effect of Political Actors on Small Firms' Business Relationships and Performance-A Case of EU and Swedish Small Firms
Place of Publication
The paper was published at the 25th IMP-conference in Marseille, France in 2009.
Despite the statement of many researchers and politicians on the vital role of SMEs for their contributions to GNP and employment, the research on SMEs relationship with political organizations is left almost untouched. This paper highlights the effect of political organizations like EU, on SMEs business performance. With emphasis on the effect of political unit on long-term business performance, the focus of this study is on how political units influence small firms. Employing business network theory, the stress is on the effect of political relationship and the connection on business relationship and finally business performance. It develops a theoretical view and examines how the coercive/supportive behaviour of political units affects directly and indirectly on business performance. While the direct effect refers to the direct relationship between the political and business units, the indirect relationship concerns the effect via coercion or support of business relationship. For the direct and indirect relationship effect on business performance the study has developed 4 hypotheses which will be tested by results from a survey involving from 134 SMEs in Sweden. Using PLS for statistical analysis, the article highlights the importanceof a firm's business relationships in both being affected by coercive actions by political organizations and also in receiving the full benefit from their supportive actions.