The effect of network relationship on the performance of SMEs

This study examines the effect of network relationship on the performance of small and medium enterprises (SMEs). SMEs strongly depend on external entities and cooperate with partners to improve in their performance. The literature review and analysis shows a distinction of the factors underlying the motivation of forming network into knowledge sharing, innovation accelerating, transaction costs reducing, better reputation, and new market opportunities creation. This study uses the measure of multiple correspondence analysis (MCA) to analyze data from questionnaires of 77 Taiwanese manufacturing SMEs. The findings divide the factors affecting the network relationship into two dimensions, network content and network relationship. The results also show that different types of network relationship have different levels of effect on performance.