The social regulation of inter-SME relations: Norms shaping SMEs relationships in Nigeria

Abstract

A field study involving 35 institutionally constrained small and medium enterprises (SMEs) was conducted to investigate how entrepreneurs operating in developing economies draw on norms in the absence of formal institutional support. Employing a qualitative approach, our findings revealed that the institutional logics perspective, which presupposes an understanding of entrepreneurial behaviour, provided insights into many of the decisions observed within the SMEs. Our interview data revealed how a variety of culturally specific norms, including those influenced by kinship, religion and trade associations, played a pivotal role in structuring market-oriented economic activities. Central to our contribution is the concept that norms play a crucial role in enforcing trade agreements. This suggests that in situations where actors cannot rely on formal institutional arrangements, norms not only limit opportunistic behaviour but also foster trust within networks. Our paper makes a significant contribution to the field of entrepreneurship by addressing issues related to norms and SMEs within economic-institutional contexts that have been largely overlooked.