The Dynamics of SME - Large Business Linkages: Findings from Six Cases

RSN-PCC Working Paper No. 17-008

30 Pages Posted: 13 Dec 2017

See all articles by Eloisa Barbin

Eloisa Barbin

Asian Institute of Management - Policy Center

Date Written: November 27, 2017


Recent literature identifies linkages with large firms as some of the enablers of small and medium enterprise (SME) development and competitiveness. This study explores the types of linkages that SMEs located in Metro Manila have forged with large firms, including how these linkages started, their advantages, and disadvantages. The paper also explores the nature of competition between SMEs and large firms, the effect of such competition on SMEs, and how SMEs overcome the disadvantages of small size.

The research methodology is descriptive. Key informant interviews with six owners and managers of SMEs involved in construction, trading and services were conducted. They were asked about the details of their engagement with large firms, the nature and effect of competition against large firms, and to cite, if there are any, government programs that helped them create or sustain linkages with large firms.

Interviews revealed that SMEs have forged forward and backward linkages as well as formal partnerships with large firms. Through these linkages, the SMEs can access inputs, technologies, technical expertise, market information, and marketing support. Competing with large firms has its benefits and disadvantages, but it has mostly exerted pressure on SMEs to improve their production processes, their products and services, or distribution and marketing channels.

Keywords: Small and Medium Enterprises, Business Linkages, Philippines, SME - Large Business Linkages, Key Informant Interviews

JEL Classification: M10, L11, L14, L24, L25, L26

Suggested Citation

Barbin, Eloisa, The Dynamics of SME - Large Business Linkages: Findings from Six Cases (November 27, 2017). RSN-PCC Working Paper No. 17-008, Available at SSRN: or

Eloisa Barbin (Contact Author)

Asian Institute of Management - Policy Center ( email )

Eugenio Lopez Foundation Bldg
Joseph McMicking Campus, 123 Paseo de Roxas
Makati City

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