Examining the impact of managers’ network size on SME performance: a case study of Interurban and local road freight transport in the Paris department

Abstract

AbstractThis study focuses on the interplay between managers’ personalities, relationships, and company performance. We investigate the influence of managers on a sample of small and medium-sized enterprises (SMEs), specifically examining the size of their networks. Our focus is on enterprises working in the sector of interurban road freight transport and local road freight transport within the Paris department. The model we propose aims to understand the advantages of a well-established and interconnected network for SME performance. We analyse how the different characteristics of a company as well as its manager’s personality and network ties can affect company performance. By drawing upon the dependency network approach, the Resource Dependency Theory, and network theory, we investigate the connection between resource and network dependencies, and how these influence firms’ behavior and long-term growth. Through our theoretical review and by analyzing a database of selected companies through the multiple linear regression and the Principal Component Analysis, we find that networking plays a vital role and significantly impacts a company’s revenues and costs, although not to the extent that we predicted. The results of our research provide evidence of the correlation between networking and performance ratios, but only partially confirm our hypotheses.