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International Small Business Journal
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SME Strategy, Embeddedness and Performance in East Cleveland, North East England

Christos Kalantaridis

University of Salford, UK, c.kalantaridis{at}salford.ac.uk

The impact of the defining characteristics of rural areas on SME development has attracted considerable interest among researchers on both sides of the Atlantic. Despite conflicting findings - influenced in part by the specificities of national contexts - there is considerable agreement among academics that SME development in the countryside may be influenced by the connectivity of rural areas with their urban counterparts.Within this context, the concept of the city-region is often used to capture the 'ripple effects' from urban centres to nearby rural areas.This article sets out to examine the case of a rural area (East Cleveland) within a city-region (Tees Valley). The article aims to explore the linkages between embeddedness patterns, enterprise strategy and performance. In doing so, it compares the experience of rural SMEs in the study area with that of a control group located in the core of the city-region (Middlesbrough).The evidence presented here shows that in the case of East Cleveland (unlike other rural areas of the UK) local embeddedness is commonly reported by the great majority of SMEs - the result of the specificities of the regional context. While disembeddedness is often linked with robust performance, local embeddedness may also underpin survival and growth among certain SMEs (for example those with no coherent strategy).At the level of the locality however, this may impact adversely upon the processes of economic development.

Key Words: embeddedness • rural areas • SMEs

International Small Business Journal, Vol. 27, No. 4, 496-521 (2009)
DOI: 10.1177/0266242609335019
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