The impact of networking on business performance: a case study of Malaysian SMEs

Business networking, including the sharing of knowledge and exchange of information, and its impact on business performance has received significant recent attention in the literature, but there is scant literature analysing the relationship between business networking and business performance within the context of business constraints. In this paper the authors argue that the impact of business networking on business performance should, most appropriately, be examined within such a context. Numerous measures are developed in the paper aimed at capturing the extent and nature of business networking, business performance, and business constraints in the context, specifically, of small and medium enterprises. Then, using exploratory factor analysis and multiple regression techniques, data from 150 Malaysian SMEs reveal that networking has a positive and significant impact on business performance, while other perceived business constraints are found to be negatively and significantly linked to business performance. The results presented suggest that measures adopted by policy makers aimed at enhancing business networking and reducing perceived business constraints will have significantly beneficial effects upon the business performance of SMEs.