Going above and beyond: How intermediaries enhance change in emerging economy institutions to facilitate small to medium enterprise development

Abstract

AbstractResearch summaryDespite knowledge about the importance of intermediaries in filling institutional voids, we do not understand how intermediaries facilitate institutional change. This research demonstrates how intermediaries use six rhetorical legitimation strategies—logos, ethos, pathos, autopoiesis, teleological, and anthropos appeals—to influence institutional change in Abia, Nigeria, that facilitate small‐to‐medium‐enterprise (SME) development in the region. While the first five rhetorical legitimation strategies are used in both developed and emerging economies, the sixth strategy—anthropos appeals, which reflect the communal character of many African cultures—seems to be unique in this context. Our findings contribute to the literature by extending our understanding of the role of rhetorical legitimation strategies in bringing about institutional change, use of rhetoric to communicate entrepreneurial opportunities, and significance of nonmarket strategies for SMEs.Managerial summarySMEs influence economic development in emerging economies but face many constraints. This research examines how intermediaries help reduce constraints SMEs in Nigeria encounter by facilitating institutional changes, through the use of six legitimation strategies (logos, pathos, ethos, autopoiesis, teleological, and anthropos). Also, this research explains how the institutional changes encourage the government to fill voids that generate beneficial outcomes to SMEs, emergent local intermediaries, the general public, and the government itself. Finally, this research finds that market actors in Nigeria use an Anthropos legitimation strategy when appealing to individuals in the local market to help with SME development. This strategy, which taps into the communal character of many African cultures and interestingly has some parallels with Confucianism philosophy, seems to be unique in emerging economies.