Does size matter?

Abstract

Purpose To develop and empirically test a framework on how firm size can matter for firm behavior and performance in strategic networks of small and medium‐sized enterprises (SME networks). Design/methodology/approach Empirical study based on statistical analysis of standardized questionnaires and analysis of interview material from face‐to‐face interviews with managers in a population of 54 firms that operates in SME networks. Findings Firm size can be an important determinant for firm performance, and for networking inside and outside the SME network. Different networking behaviors are found to have different roles for pursuing corporate entrepreneurship and for gaining performance effects in interaction with corporate entrepreneurship. Originality/value Prior research has suggested larger firms as valuable for holding firms in SME networks together, but has not put much effort in explaining why and how, and what they gain from doing this. This study advances these suggestions by showing how larger firms can prosper simultaneously as they bind firms together in these networks. Since firm size may determine networking behavior and outcomes in SME networks, the suitability of a larger vs a smaller firm size for SME network participation is discussed.

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