The influence of network characteristics on information access, marketing competence and perceptions of performance in small rural businesses

This study focused on the influence of network relationships on the ability of retail entrepreneurs in small communities to access and use business information. I drew upon social network theory to propose a model linking an entrepreneur's network characteristics to the level of social capital available in the network. I suggested that social capital positively influences the quality of information that entrepreneurs can access through their strong-tie and weak-tie networks. Information quality is then transformed into marketing competence, which positively impacts firm performance.; Data were collected from 112 independent gift retailers in small towns in Midwestern states, using a mailed survey instrument. Exploratory and confirmatory factor analysis were used to test validity and reliability of model constructs. A network was conceptualized as a latent variable, which explained the density, centrality, friendship and perceptual homophily features of the entrepreneur's network ties. Social capital was a latent variable, which explained the level of trust, commitment and reciprocal intentions among identified network members. Information quality measured the relevancy, timeliness and specificity of business information received from network members. Marketing competence was characterized as the ability to assess customer needs, provide quality customer service, and introduce innovation. Performance was measured by perceptions of success relative to industry and competitors.; Structural equation techniques were used to test causal relationships in the model. Results showed that network ties influenced the level of social capital in both strong-tie and weak-tie information networks. Social capital influenced the richness of information received from these networks. Social capital did not have a direct influence on perceptions of firm performance.; Information received from weak-tie networks influenced marketing competence in introducing innovation. No fink between information from strong-tie networks and marketing competence was found. There was a significant relationship between both local and innovative marketing competence and performance.; Results support social network theory contentions that both strong and weak ties facilitate the flow of information. Implications for retail entrepreneurs suggest that networking is an important activity for gathering business information, and that strength of network relationships can influence the quality of information. This research also highlights the need for retail entrepreneurs to better use the information they receive to build marketing skills.