EXAMINING THE ROLE OF FIRM SIZE IN COMMITMENT - SMALL FIRM PERFORMANCE RELATIONSHIP AMONG SOUTHEAST EUROPEAN SMES

Abstract: Studies on the eff ect of the fi rm size and commitment on small fi rm performance indicators are inconclusive, especially in the geographic area of Southeast Europe. This study examines the role of fi rm size in the relationship between commitment and fi rm sales growth, operating profi t and market share. Alterations in fi rm size and commitment are attributed to diff erences in market structures, namely, non-European union and European union member states. Results of the empirical research state that fi rm size and commitment have a positive and signifi cant eff ect on performance indicators (sales growth rate, operating profi t, and market share). Separating fi rms that originate from the European union member states from those that do not, suggested that fi rms that are not part of the European union rely on commitment more fi rmly than those that from the European union member states. Moreover, fi rm size moderates the relationship between commitment and fi rm performance indicators only in the non-European union countries. Larger fi rm size indicates a smaller eff ect of the commitment on fi rm performance for fi rms from the non-European union countries. The study concludes with limitations and practical implications of the empirical research.

 

Keywords: commitment, small fi rm performance, fi rm size, Southeast Europe, transition countries