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How relational embeddedness affects business performance through trust: empirical research on emerging SMEs

Author

Listed:
  • Fatemeh S. Shahmehr
  • Seyed Mohammad Sadegh Khaksar
  • Reza Zaefarian
  • Kambiz Talebi

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.

Suggested Citation

  • Fatemeh S. Shahmehr & Seyed Mohammad Sadegh Khaksar & Reza Zaefarian & Kambiz Talebi, 2015. "How relational embeddedness affects business performance through trust: empirical research on emerging SMEs," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 26(1), pages 61-77.
    • Handle: RePEc:ids:ijesbu:v:26:y:2015:i:1:p:61-77
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    Cited by:

    1. Judit Oláh & Yusmar Ardhi Hidayat & Zdzisława Dacko-Pikiewicz & Morshadul Hasan & József Popp, 2021. "Inter-Organizational Trust on Financial Performance: Proposing Innovation as a Mediating Variable to Sustain in a Disruptive Era," Sustainability, MDPI, vol. 13(17), pages 1-18, September.
    2. Wanyue Wei & Zheng He & Lez Rayman-Bacchus & GuangMing Xiang, 2019. "Do Industrial Clusters Still Matter to Trust-Building in the Internet Era? A Network Embeddedness Perspective," SAGE Open, , vol. 9(3), pages 21582440198, August.

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