IDEAS home Printed from https://ideas.repec.org/a/spr/eurasi/v6y2016i1d10.1007_s40821-015-0033-1.html
   My bibliography  Save this article

Network alliances and firms’ performance: a panel data analysis of Pakistani SMEs

Author

Listed:
  • Naqeeb Ur Rehman

    (Hazara University)

Abstract

Empirical studies shows that SMEs are characterized by budget constraints and are reluctant to invest in innovation activities such as undertaking R&D, taking out patents, and hiring highly qualified research staff. This paper suggests that SMEs’ can adopt network alliances to minimize their resource constraints. SMEs’ network alliances such as joint ventures, R&D cooperation and firms’ co-located in the industrial zones positively influence the firms’ labour productivity and innovation performance. In addition, SMEs are engaged in product and process innovation, quality standards and management experience have a positive impact on the firm’s labour productivity and innovation performance. To the best of my knowledge, hardly any empirical study is carried out to analyze the Pakistani SMEs using unbalance panel data. This research paper has used 2 year unbalanced panel data (2002 and 2007) on 391 Pakistani manufacturing SMEs. Overall, two models have been used with generalized least square estimation and probit analysis using the random effects.

Suggested Citation

  • Naqeeb Ur Rehman, 2016. "Network alliances and firms’ performance: a panel data analysis of Pakistani SMEs," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(1), pages 37-52, April.
    • Handle: RePEc:spr:eurasi:v:6:y:2016:i:1:d:10.1007_s40821-015-0033-1
    DOI: 10.1007/s40821-015-0033-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40821-015-0033-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40821-015-0033-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bjerke, Lina & Johansson, Sara, 2014. "Innovation and firm collaboration: An exploration of survey data," Working Paper Series in Economics and Institutions of Innovation 383, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    2. Mehmet Huseyin Bilgin & Hakan Danis & Ender Demir & Chi Keung Marco Lau (ed.), 2015. "Innovation, Finance, and the Economy," Eurasian Studies in Business and Economics, Springer, edition 127, number 978-3-319-15880-8, June.
    3. Milé Terziovski, 2010. "Innovation practice and its performance implications in small and medium enterprises (SMEs) in the manufacturing sector: a resource‐based view," Strategic Management Journal, Wiley Blackwell, vol. 31(8), pages 892-902, August.
    4. Bronwyn Hall & Francesca Lotti & Jacques Mairesse, 2009. "Innovation and productivity in SMEs: empirical evidence for Italy," Small Business Economics, Springer, vol. 33(1), pages 13-33, June.
    5. Heri Bezic & Katija Vojvodic & Nebojsa Stojcic, 2010. "Export Competitiveness, Firm Behaviour and Obstacles for doing Business," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 10, pages 11-26.
    6. Poh Kam Wong & Lena Lee & Maw Der Foo, 2008. "Occupational Choice: The Influence of Product vs. Process Innovation," Small Business Economics, Springer, vol. 30(3), pages 267-281, March.
    7. Harris, Richard, 2009. "Spillover and backward linkage effects of FDI: empirical evidence for the UK," LSE Research Online Documents on Economics 33206, London School of Economics and Political Science, LSE Library.
    8. Uwe Cantner & Elisa Conti & Andreas Meder, 2009. "Networks and Innovation: The Role of Social Assets in Explaining Firms' Innovative Capacity," European Planning Studies, Taylor & Francis Journals, vol. 18(12), pages 1937-1956, November.
    9. Andreas Koch & Harald Strotmann, 2008. "Absorptive Capacity And Innovation In The Knowledge Intensive Business Service Sector," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(6), pages 511-531.
    10. Karlsson, Charlie & Olsson, Ola, 1998. "Product Innovation in Small and Large Enterprises," Small Business Economics, Springer, vol. 10(1), pages 31-46, February.
    11. Ainul Abdul Mohsin & Hasliza Abdul Halim & Noor Haslina Ahmad, 2015. "Competitive Intelligence Among SMEs: Assessing the Role of Entrepreneurial Attitude Orientation on Innovation Performance," Eurasian Studies in Business and Economics, in: Mehmet Huseyin Bilgin & Hakan Danis & Ender Demir & Chi Keung Marco Lau (ed.), Innovation, Finance, and the Economy, edition 127, pages 15-22, Springer.
    12. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    13. Ralph Kober & Thanesvary Subraamanniam & John Watson, 2012. "The impact of total quality management adoption on small and medium enterprises’ financial performance," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 52(2), pages 421-438, June.
    14. Grando, Alberto & Belvedere, Valeria, 2006. "District's manufacturing performances: A comparison among large, small-to-medium-sized and district enterprises," International Journal of Production Economics, Elsevier, vol. 104(1), pages 85-99, November.
    15. Cheng Hsiao, 2007. "Panel data analysis—advantages and challenges," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 16(1), pages 1-22, May.
    16. Minarelli, F. & Raggi, M. & Viaggi, D., 2013. "Network for innovation as a way to enhance competitiveness: an overview of Italian food SMEs entering networks," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149934, Italian Association of Agricultural and Applied Economics (AIEAA).
    17. Peter J. Lane & Michael Lubatkin, 1998. "Relative absorptive capacity and interorganizational learning," Post-Print hal-02311860, HAL.
    18. Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2005. "SMEs, Growth, and Poverty: Cross-Country Evidence," Journal of Economic Growth, Springer, vol. 10(3), pages 199-229, September.
    19. David Audretsch, 2004. "Sustaining Innovation and Growth: Public Policy Support for Entrepreneurship," Industry and Innovation, Taylor & Francis Journals, vol. 11(3), pages 167-191.
    20. Alistair R. Anderson & María del Mar Benavides-Espinosa & Antonia Mohedano-Suanes, 2011. "Innovation in services through learning in a joint venture," The Service Industries Journal, Taylor & Francis Journals, vol. 31(12), pages 2019-2032, January.
    21. Berchicci, Luca, 2013. "Towards an open R&D system: Internal R&D investment, external knowledge acquisition and innovative performance," Research Policy, Elsevier, vol. 42(1), pages 117-127.
    22. P. Kim, 2000. "R&D and Firm Size in the Information and Telecommunicatons Industry of Korea," Small Business Economics, Springer, vol. 15(3), pages 183-192, November.
    23. Christian Rammer & Dirk Czarnitzki & Alfred Spielkamp, 2009. "Innovation success of non-R&D-performers: substituting technology by management in SMEs," Small Business Economics, Springer, vol. 33(1), pages 35-58, June.
    24. Antonio Musolesi & Jean-Pierre Huiban, 2010. "Innovation and productivity in knowledge intensive business services," Journal of Productivity Analysis, Springer, vol. 34(1), pages 63-81, August.
    25. Thorsten Beck & Asli Demirgüç-Kunt, 2004. "SMEs, Growth, and Poverty," World Bank Publications - Reports 11278, The World Bank Group.
    26. Johan Wiklund & Holger Patzelt & Dean Shepherd, 2009. "Building an integrative model of small business growth," Small Business Economics, Springer, vol. 32(4), pages 351-374, April.
    27. Estrada, Isabel & de la Fuente, Gabriel & Martín-Cruz, Natalia, 2010. "Technological joint venture formation under the real options approach," Research Policy, Elsevier, vol. 39(9), pages 1185-1197, November.
    28. Cheng Hsiao, 2007. "Rejoinder on: Panel data analysis—advantages and challenges," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 16(1), pages 56-57, May.
    29. Irene van Staveren & Peter Knorringa, 2007. "Unpacking social capital in Economic Development: How social relations matter," Review of Social Economy, Taylor & Francis Journals, vol. 65(1), pages 107-135.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anna M. Ferragina & Fernanda Mazzotta & Khalid Sekkat, 2016. "Financial constraints and productivity growth across the size spectrum: microeconomic evidence from Morocco," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(3), pages 361-381, December.
    2. Chien-Nan Chen & Chengli Tien & Bernard Gan, 2019. "The postentry performance of business groups’ new venture affiliates," Australian Journal of Management, Australian School of Business, vol. 44(2), pages 325-343, May.
    3. Gkypali, Areti & Filiou, Despoina & Tsekouras, Kostas, 2017. "R&D collaborations: Is diversity enhancing innovation performance?," Technological Forecasting and Social Change, Elsevier, vol. 118(C), pages 143-152.
    4. Sheema Matloob & Mónica Lorena Sánchez Limón & Halia Mayela Valladares Montemayor & Ali Raza & Julio Cesar Castanon Rodriguez, 2023. "Does Strategic Change Enhance the Relationship between Firms’ Resources and SMEs Performance in Pakistan?," Sustainability, MDPI, vol. 15(3), pages 1-20, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rehman, Naqeeb Ur, 2016. "Innovation Performance of Chilean SMEs: A Bivariate Probit Analysis," MPRA Paper 68827, University Library of Munich, Germany.
    2. José Albors-Garrigos & José L. Hervas-Oliver, 2011. "Making sense of innovation by R&D and non-R&D innovators in low technology contexts: a forgotten lesson for policymakers," Working Papers. Serie EC 2011-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    3. Rehman, Naqeeb Ur, 2015. "Does Internal and External R&D Affect SMEs Innovation Performance? Micro Level Evidence from India and Pakistan," EconStor Preprints 113229, ZBW - Leibniz Information Centre for Economics.
    4. Wim Naudé, 2011. "Foreign Aid for Innovation: The Missing Ingredient in Private Sector Development?," Working Papers 2011/35, Maastricht School of Management.
    5. Pål Børing, 2019. "The relationship between firm productivity, firm size and CSR objectives for innovations," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(3), pages 269-297, September.
    6. Rehman, Naqeeb Ur, 2016. "Does Internal and External Research and Development Affect Innovation of Small and Medium-Sized Enterprises? Evidence from India and Pakistan," ADBI Working Papers 577, Asian Development Bank Institute.
    7. Joanna Błach & Monika Wieczorek-Kosmala & Joanna Trzęsiok, 2020. "Innovation in SMEs and Financing Mix," JRFM, MDPI, vol. 13(9), pages 1-19, September.
    8. Richard Harris & John Moffat, 2011. "R&D, Innovation and Exporting," SERC Discussion Papers 0073, Centre for Economic Performance, LSE.
    9. Andrés Barge-Gil & Alberto López, 2015. "R versus D: estimating the differentiated effect of research and development on innovation results," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(1), pages 93-129.
    10. Nicolas Classen & Martin Carree & Anita Gils & Bettina Peters, 2014. "Innovation in family and non-family SMEs: an exploratory analysis," Small Business Economics, Springer, vol. 42(3), pages 595-609, March.
    11. Hervas-Oliver, Jose-Luis & Sempere-Ripoll, Francisca & Boronat-Moll, Carles, 2012. "Process innovation objectives and management complementarities: patterns, drivers, co-adoption and performance effects," MERIT Working Papers 2012-051, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. Marco Capasso & Tania Treibich & Bart Verspagen, 2015. "The medium-term effect of R&D on firm growth," Small Business Economics, Springer, vol. 45(1), pages 39-62, June.
    13. Baumann, Julian & Kritikos, Alexander S., 2016. "The link between R&D, innovation and productivity: Are micro firms different?," Research Policy, Elsevier, vol. 45(6), pages 1263-1274.
    14. Shuang Meng & Pengxiang Wang & Jiajie Yu, 2022. "Going Abroad and Going Green: The Effects of Top Management Teams’ Overseas Experience on Green Innovation in the Digital Era," IJERPH, MDPI, vol. 19(22), pages 1-20, November.
    15. Rammer, Christian & Köhler, Christian & Murmann, Martin & Pesau, Agnes & Schwiebacher, Franz & Kinkel, Steffen & Kirner, Eva & Schubert, Torben & Som, Oliver, 2010. "Innovationen ohne Forschung und Entwicklung: Eine Untersuchung zu Unternehmen, die ohne eigene FuE-Tätigkeit neue Produkte und Prozesse einführen," Studien zum deutschen Innovationssystem 15-2011, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    16. Kafouros, Mario & Wang, Chengqi & Piperopoulos, Panagiotis & Zhang, Mingshen, 2015. "Academic collaborations and firm innovation performance in China: The role of region-specific institutions," Research Policy, Elsevier, vol. 44(3), pages 803-817.
    17. Trinh Chieu & Tam Nguyen, 2018. "Slack resources and innovation in Vietnamese SMEs: A behavioural, stewardship, and institutional perspective," WIDER Working Paper Series 78, World Institute for Development Economic Research (UNU-WIDER).
    18. repec:wsi:acsxxx:v:21:y:2019:i:08:n:s1363919619500117 is not listed on IDEAS
    19. David B. Audretsch & Alexander S. Kritikos & Alexander Schiersch, 2020. "Microfirms and innovation in the service sector," Small Business Economics, Springer, vol. 55(4), pages 997-1018, December.
    20. Alfonso Expósito & Juan A. Sanchis-Llopis, 2018. "Innovation and business performance for Spanish SMEs: new evidence from a multi-dimensional approach," Working Papers 1805, Department of Applied Economics II, Universidad de Valencia.
    21. Audretsch, David & Hafenstein, Marian & Kritikos, Alexander S. & Schiersch, Alexander, 2018. "Firm Size and Innovation in the Service Sector," IZA Discussion Papers 12035, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Innovation; Networks; R&D; SMEs; Pakistan;
    All these keywords.

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:eurasi:v:6:y:2016:i:1:d:10.1007_s40821-015-0033-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.