Operation of Business Supporting Networks: Evidence from an EU Candidate Country

Vello Vensel
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Vello Vensel: Department of Economics at Tallinn University of Technology

No 117, Working Papers from School of Economics and Business Administration, Tallinn University of Technology

Abstract: Business firms operate in a certain environment in which they interact with one another, with individuals, governmental organizations, financial institutions and various other interest groups. Operation of respective social networks (both voluntary and private market-determined) may have an important effect to the overall business environment. This paper presents and analyses some results of the special sample survey of Estonian firms undertaken in 1994-2000. Our main attention in this paper is paid to business supporting services provided by various institutions and to the operation of disputes’ resolution mechanism, using social networks concept – other related issues see Vensel and Wihlborg (2001). It is argued that the state enforcement mechanism is working weekly in the still unstable legal environment and firms have to use different self-enforcement mechanisms (through social networks) to resolve disputes. Social networks are also used for obtaining additional financing of the business. The success of the operation of social networks depends on the government economic policy.

Keywords: social networks; social capital; trust; business supporting services; disputes resolution mechanism; value creation; enforcement mechanism. (search for similar items in EconPapers)
JEL-codes: D74 D92 M20 (search for similar items in EconPapers)
Date: 2004
Note: Financial support from the Estonian Science Foundation (Project 5185) for carrying out sample surveys in Estonia is greatly acknowledged by the author.
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Published in Working Papers in Economics, School of Economics and Business Administration,Tallinn University of Technology (TUTWPE), Pages 221-234

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