African Business Groups: How Does Group Affiliation Improve SMEs' Export Intensity (original) (raw)

Can small and medium-sized enterprises (SMEs) in Sub-Saharan Africa overcome market imperfections to get the resources needed for exporting? We hypothesize that in many emerging economies, domestically-owned SMEs address the hurdle of imperfect markets by creating private governance systems in the form of long-term business relationships in business groups (BGs). Our data is collected from the World Bank's Enterprise Survey and comprises 8,885 SMEs in 33 Sub-Saharan African countries. We find that the export intensity of BG-affiliated SMEs is superior to independent firms, and that financial, human, and technological resources mediate the intensity of the BG affiliation-export relationship.