Business networks and the competitiveness of small manufacturing firms in Sweden's northern periphery

Abstract

The establishment of inter-firm networks is a key resource for the competitiveness of small firms. The literature on small firm networking stresses the importance of building a balanced network of regional and extra-regional networks in order to engender optimal levels of firm performance. In peripheral regions, the academic debate is focused on understanding how geographical remoteness affects the spatial orientation of networks of small firms. Based on the analysis of survey responses and financial accounts of 26 small manufacturing firms located in Sweden's northern periphery, the study investigates how the spatial configuration of networks, and particularly their regional and international components, is related to other aspects of the firms, such as geographical location or level of performance. The study shows that increased geographical remoteness tends to promote the establishment of international relations instead of hindering them and that peripheral small firms able to penetrate international markets tend to achieve higher levels of productivity. The subsequent discussion stresses the need to rethink the spatiality of policies promoting small firm networks, from a locally-bound to a more diversified, internationalised one.

Keywords:

• internationalisation
• performance
• peripherality
• small firm networks
• small manufacturing firm

Acknowledgements

I thank Moa Hedström and Andrew Copus, former colleagues at Nordregio, for their contribution to the DERREG project. I also to thank the reviewers and editor for their constructive comments.

Editor: Michael Jones, Catriona Turner

Notes

1 The Affärsdata website was shut down on 1 July 2014. It was replaced by Nordic Business Key portal.