GOVERNANCE OF INNOVATION AND GROWTH IN SME NETWORKS

Abstract

The aim of this article is to reveal what organising of innovation and growth can be enabled in small and medium-sized enterprise (SME) networks. This is especially interesting for the governance of loosely coupled networks. The research is conducted in the Danish food industry with three food-producing firm networks. The posed hypotheses are tested in a structural equation modelling (SEM) approach with the available data of 60 SMEs. The findings show that the governance of preferred behaviours of SMEs has a considerable significant positive impact on product and systematic innovation, which have a significant impact on growth. Governance of network connections is also found to have a significant positive impact on growth. The findings contribute to an understanding of how both governance of preferred SME behaviour and network connections enable innovation. This study provides SMEs, SME network organisations and policy bodies with an enhanced understanding of governance approaches.