Perceived Uncertainty, Networking and Export Performance: A Study of Nordic SMEs

Document Type

Article

Publication Date

1-1-2006

Description

Purpose – The purpose of this paper is to develop and empirically test model depicting the relationships among perceived environmental uncertainty, domestic and foreign networking, and export performance. Design/methodology/approach – A sample of small and medium sized enterprises (SMEs) from Finland, Sweden and Norway serve as the study setting. Data were collected via mail surveys from random samples of SME owners/managers. Usable responses were 75 from Finland, 111 from Sweden and 71 from Norway. Findings – Of the four dimensions of uncertainty, only uncertainty about supplier markets emerged as a significant driver of domestic networking activities of SMEs. While domestic networking did not have a significant influence, foreign networking showed a significant positive impact on SMEs' export performance. Firm size was found to have positive impacts on foreign networking and export performance. Research limitations/implications – The study was limited to manufacturing SMEs in a particular region. Replications in other industries and regions are needed to validate the current findings. People from Finland, Norway and Sweden share similar cultural values and they are low on uncertainty-avoidance. Hence, they are not threatened by environmental uncertainties and, consequently, may not feel compelled to engage in networking to reduce uncertainty. Practical implications – The positive linkage between foreign networking and export performance suggests that public officials in these countries should encourage SMEs to strengthen their existing foreign networks and facilitate formation of new ones via trade missions in other countries. Originality/value – Understanding the role of networking, as a potential buffer between environmental uncertainty and export performance, should be of interest to both researchers and practitioners.

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