The Influence of Business Networks on the International Trade of Small Businesses

Abstract

Social business networking is a socioeconomic activity of like-minded entrepreneurs who share the same goals and social concerns. Participating in the social business networks at international level is an option for small businesses to penetrate and develop competitiveness in export markets. Social business networks are instrumental in overcoming the export barriers especially for inexperienced entrepreneurs since participating networks provide them with opportunities and enhance the performance of their enterprises through penetrating and developing competitiveness in overseas markets. Business networking relations of entrepreneurs provides valuable and specialized knowledge and competencies for entrepreneurs to overcome export barriers arising mainly from lack of prior knowledge of external markets and experience. The studies on export performance have addressed these barriers as impediments or limitations on the export performance of companies in general and small and medium-sized enterprises (SMEs) in particular. Most of the empirical studies in export literature mainly focus on internal or controllable factors such as managerial factors, company characteristics and competencies, and export marketing strategic capabilities, since they are significant determinants in overcoming the export barriers.This study attempts to assess the impact of engaging in the networking activities on export performance of SMEs referring these firm-level controllable determinants of export performance. The survey data collected from 248 Turkish SMEs were analyzed with SPSS AMOS 23 employing structural equation modeling (SEM) to test the validity of the hypothesized model. The findings of the study point out the positive correlation between engaging social business networks and the export performance of the enterprises. The findings also provide valuable information about the influence of firm level factors, such as the degree of internationalization, the education level of the manager, export marketing competency, size and export experience, on the relationship between engaging in the networking activities and export performance.