African Business Groups: How Does Group Affiliation Improve SMEs’ Export Intensity?
Mahdi Tajeddin, Michael Carney
Entrepreneurship Theory and Practice · 2019 · Volume 43 · Issue 6
Abstract
Can small and medium-sized enterprises (SMEs) in sub-Saharan Africa (SSA) overcome market imperfections to get the resources needed for exporting? We hypothesize that in many emerging economies, domestically owned SMEs address the hurdle of imperfect markets by creating private governance systems in the form of long-term business relationships in business groups (BGs). Our data are collected from the World Bank’s Enterprise Survey and comprises 8,885 SMEs in 33 SSA countries. We find that the export intensity of BG-affiliated SMEs is superior to independent firms, and that financial, human, and technological resources mediate the intensity of the BG affiliation–export relationship.
Keywords
business group affiliation, export intensity, SMEs, emerging economies, sub-Saharan Africa
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