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Small Business Economics

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01.06.2013

Formal business networking and SME growth

verfasst von: Bilitis Schoonjans, Philippe Van Cauwenberge, Heidi Vander Bauwhede

Erschienen in: Small Business Economics | Ausgabe 1/2013

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Abstract

This paper provides new empirical evidence on the impact of formal business networking on small and medium-sized enterprise (SME) growth. Using a large, unbalanced panel data set of Flemish SMEs over the period 1992–2008, we examine whether participation in a government-supported program aimed at providing small business managers with structured formal networking contacts is associated with SME growth. Our results suggest that formal business networking is significantly positively correlated with net asset and added value growth.

Vorheriger Artikel Private investment in small public entities

Nächster Artikel Modeling productive entrepreneurship in developing countries

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The Flemish government evaluates the PLATO program on the participation rates, since these are likely to considerably influence the effectiveness of the program.

Hausman’s (1978) test is performed for all three models in order to determine which estimator should be used. In each case, the null hypothesis is rejected, indicating that the fixed effects model is the correct model to use.

Source: www.statbel.fgov.be.

Added value is calculated as sales less cost of sales.

Based on the NACE-BEL classification of industries, we constructed 13 industry groups in order to calculate the median industry growth rates.

Havnes and Senneseth (2001) point out that there often exists a time delay between the networking ‘event’ and its outcomes. This implies that a firm that networks in t − 1 will probably perform better at time t, but not necessarily at time t − 1. Consequently, we included a time lag for the PLATO dummy in our regression equation.

We took the natural logarithm of all size and age measures in our models. Since the natural logarithm of zero is undefined, the number of observations will decrease when the value for size and/or age equals zero. As small businesses often do not have any employees, employment size will equal zero in many cases. Therefore, the number of observations in the employment growth sample is markedly lower than in the net asset and added value growth sample.

However, by including firm fixed effects in our regression models we control for time-invariant, unobservable factors that may influence selection.

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Titel: Formal business networking and SME growth
verfasst von: Bilitis Schoonjans
Philippe Van Cauwenberge
Heidi Vander Bauwhede
Publikationsdatum: 01.06.2013
Verlag: Springer US
Erschienen in: Small Business Economics / Ausgabe 1/2013
Print ISSN: 0921-898X
Elektronische ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-011-9408-6

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