Analysis of the Relationship Between Strategic Networking and Performance Among Croatian Service Sector SMEs

Abstract

The aim of this study is to analyze the impact of strategic networking on SMEs’ performance in the Croatian service sector. Data were collected from 136 SMEs using an e-mail questionnaire. Multiple linear regression was used as an analytical method to test the proposed hypothesis and sub-hypothesis. The results indicated that strategic networking has a significantly positive effect on financial and non-financial business performance. The external environment has a positive impact on service SMEs’ strategic networking. Moreover, the results revealed that the interaction with the external environment positively affects strategic networking—performance relationship. It is recommended that SMEs operating in the service sector need to strive to embrace strategic networking because it provides them with higher performance results and a more competitive position in the external environment. Finally, the study contributes to the existing knowledge and theory on the impact of strategic networking on business performance of SMEs, primarily by focusing on the service sector context in a small and open economy such as Croatia.