There Is No Free Lunch: The Cost of Informal Networking for Entrepreneurs in Southeast Europe

Abstract

This article investigates informal networks of entrepreneurs in Southeast Europe. Informal networks are defined as based on trust relationships and used for seeking competitive advantage in business. We assess the costs of informal networks, including their non-monetary and monetary components, on the basis of in-depth interviews with entrepreneurs in small and medium-sized business in the region. The evidence points to an ambivalence towards informal networks, perceived to be both affective and instrumental, and the prevalence of double standards. Informal networks are welcome when they help but resented when they help others, thus reproducing the pressure of maintaining informal networks.