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Theory and Empirical Evidence of Business Support Networks

Author

Listed:
  • Kaie Kerem

    (School of Economics and Business Administration, Tallinn University of Technology)

  • Vello Vensel

    (School of Economics and Business Administration, Tallinn University of Technology)

Abstract

Business firms operate in a certain environment in which they interact with one another, with individuals, governmental organisations, financial institutions and various other interest groups. Operation of respective economic and social networks (both voluntary and private market determined) may have an important effect on the overall business environment. This paper presents and analyses some results of the special sample survey of Estonian firms undertaken in 1994-2003. Our main attention in this paper is focused on business supporting services provided by various institutions and on the operation of disputesí resolution mechanism, using the concept of social networks. It is argued that the state enforcement mechanism is working weakly in the still unstable legal environment and firms have to use different self-enforcement mechanisms (through social networks) to resolve disputes. Social networks are also used for obtaining additional financing for investment. The success of the operation of social networks depends on the government economic policy.

Suggested Citation

  • Kaie Kerem & Vello Vensel, 2005. "Theory and Empirical Evidence of Business Support Networks," Working Papers 129, Tallinn School of Economics and Business Administration, Tallinn University of Technology.
    • Handle: RePEc:ttu:wpaper:129
    Note: Financial support from the Estonian Science Foundation (projects No. 5185 and 6186) for carrying out sample surveys in Estonia is greatly acknowledged by the authors.
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    More about this item

    Keywords

    economic and social networks; social capital; business supporting services; enforcement mechanism; value creation.;
    All these keywords.

    JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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