How relational embeddedness affects business performance through trust: empirical research on emerging SMEs Online publication date: Thu, 20-Aug-2015
by Fatemeh S. Shahmehr; Seyed Mohammad Sadegh Khaksar; Reza Zaefarian; Kambiz Talebi
International Journal of Entrepreneurship and Small Business (IJESB), Vol. 26, No. 1, 2015
Abstract: In developing countries, emerging small and medium enterprises (SMEs) have been pursuing new opportunities to capture social ties. This kind of business development helps them to maintain their position in the market. By analysing data from 120 emerging Iranian SMEs, this research indicates that relational embeddedness in the form of personal relations, dyadic economic interactions and dyadic social capital, has a significantly positive impact on business performance. This study specifically considers the ways in which trust in both inter-personal and inter-organisational levels, mediates these relationships. Structural equation modelling was used to examine the proposed model. The model was tested for validity and demonstrated a high degree of validity. Surprisingly, dyadic economic interactions are shown to have the weakest impact on emerging SMEs.
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