Title: Direct and indirect impact of political activities on business performance - the case of the European Union and Swedish small firms

Authors: Amjad Hadjikhani; Cecilia Lindh; Firouze Pourmand Hilmersson; Peter Thilenius

Addresses: Department of Business Studies, Uppsala University, Uppsala, Sweden ' School of Business, Society and Engineering, Mälardalen University, Västerås, Sweden ' School of Business and Economics, Linneaus University, Kalmar, Sweden ' Department of Business Studies, Uppsala University, Uppsala, Sweden

Abstract: In this paper, the consequences of decisions by the EU on SMEs' business performance are analysed. The business network approach is employed to study how the coercive or supportive behaviour of political organisations directly and indirectly affect SMEs' business performance. The result highlights that the direct effect refers to the immediate interaction between the political and business units, whereas the indirect concerns the outcome of political units on other business firms that SMEs have relationships with. To test the assumed direct and indirect effect on business performance, four hypotheses are formulated and tested with PLS using data from a quantitative survey involving 134 SMEs in Sweden and the EU. The paper emphasises the importance of a firm's business relationships as being affected by coercive actions of political organisations, as well as receiving the full benefit from those actions of a supportive nature.

Keywords: business performance; small and medium-sized enterprises; SMEs; business relationships; political relationships; connections; coercive behaviour; supportive behaviour; European Union; EU; direct impact; indirect impact; political activities; politics; Sweden; small firms; business networks; PLS; partial least squares; political organisations.

DOI: 10.1504/IJBE.2016.074790

International Journal of Business Environment, 2016 Vol.8 No.1, pp.1 - 18

Received: 09 Oct 2015
Accepted: 09 Oct 2015

Published online: 17 Feb 2016 *

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