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Stakeholder and Social Capital Approaches as Explanations for Relationships between SMEs and State Officials in Different Transition Economies

Research output: Working paper

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  • Y Ivanova
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Abstract

This study targets the determination of support that small and medium enterprises (SMEs) provide to government representatives of their choice (in the form of donations, influence through their networks, information, and votes). The study tests stakeholder and social capital approaches as legitimate explanations for SMEs' relationships with state representatives in different transition economies, specifically Belarus as a state-controlled transition economy and Ukraine as a rent-seeking state (Aslund, 2002). The study shows that the stakeholder approach is sensitive to business environments and more applicable in a rent-seeking state where the parties can perceive value in their exchange. Social relations motivate the SMEs' support in both types of transition economies.