The impact of formal SME networks in emerging economies: a study of formal manufacturing networks in Pakistan

Abstract

Research on the SME networks in the developed economies where there are structured systems, infrastructure, appropriate business environment and value networks based on technology intelligence found that impacts of networking and trust building are positive on the firm's performance. The aim of this research is to study the impact of formal networks established through a structured approach with organised network administration in the emerging economies where legal systems, infrastructure, business environment and culture are not conducive of networking and trust building. We explored the impacts of formal networks (Bosworth and Rosenfeld, 1992) on the SME manufacturing units in the garments, cutlery and fans industrial sectors in Pakistan. We observed positive transactional and transformational outcomes due to networking, where positive outcomes were directly proportional to the number of hours of interaction within a network among member firms and their geographical proximity.