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An Institutionalist Approach to SMEs: The Role of Power Relations and Transaction Costs.

Authors :
Lah, Marko
Sušjan, Andrej
Source :
Journal of Economic Issues (Taylor & Francis Ltd); Sep2022, Vol. 56 Issue 3, p721-740, 20p, 1 Diagram, 1 Chart, 1 Graph
Publication Year :
2022

Abstract

The article attempts to combine Alfred Eichner's institutionalist theory of the megacorp and a corresponding definition of small and medium-sized enterprises (SMEs) with transaction cost theory (TCT) based on firms' asset specificity. We have identified three types of SMEs: subcontracting SMEs as "spokes" within hub-megacorp network, independent SMEs as local competitors of megacorps, and SMEs as partners in cluster networks. The article outlines some distinctive features of the three types and then concentrates on subcontracting SMEs, presenting their submission to megacorp's power through mark-down pricing and their consequent inability to grow. We mention some illustrative examples from Slovenia, a small transition economy, in which many SMEs have been part of international megacorps' supply chains. We conclude that TCT, in spite of its neoclassical paradigmatic background, enriches the institutionalist approach to SMEs without changing its evolutionary character, inherited from old institutionalism. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
00213624
Volume :
56
Issue :
3
Database :
Complementary Index
Journal :
Journal of Economic Issues (Taylor & Francis Ltd)
Publication Type :
Academic Journal
Accession number :
159448515
Full Text :
https://doi.org/10.1080/00213624.2022.2079933