What connections in networks of private entrepreneurs are related to growth?

Abstract

The purpose of this paper is to present the connections in private networks of entrepreneurs that are related to growth in turnover. This will be illustrated through the study of growth patterns in three Danish food networks containing 93 SMEs. The research question is explored through a quantitative study that employs statistics and causal path modelling on the impact of connections among physical, social and economical spaces on growth. The main findings indicate that growth is embedded in entrepreneurial networks and is significantly dependent on the number of connections in physical space as well as on the heterogeneity of the value chain. Connections in the social space have a high degree of co-variance with the physical space but indirectly have a negative impact on growth. The implications of these findings explain the need for greater emphasis on physical connections and for further exploration of the impact of heterogeneous value chain activities on growth for entrepreneurial networking firms in rural areas.