Networking and its impacts on SMEs’ performance at Ho Chi Minh City, Vietnam

Abstract

The sufficient sample of 620 SMEs is investigated to find out how firm performance is affected by networking linkages. Findings proved that stronger network linkages, and an increase in network intensity cause a raise in firm performance. Additionally, an increase in network range contributes into saving labor cost of SMEs. And the higher activity with network actors, the higher productivity of SMEs. The study brings interesting findings and a great contribution to literature review. Once the firm has more frequency of advice and supports from its own network, labor costs are saved. Another interesting point is that SME’s productivity is a significant association with its networking score. The study also confirms that the larger employee size of SMEs causes a higher returns on equity (ROE). Consequently, small firms have contacts with their surroundings, but these contacts aren’t enough strong for their operation to improve ROE. In short, findings are significant contributions to policy makers for.