Özcan, Gül
(1993)
Small firms and local economic development in Turkey: three case study areas.
PhD thesis, London School of Economics and Political Science.
Abstract
This thesis analyses small firms and local economic development in a semi-peripheral country, Turkey. The study argues that small firms in Turkey, as in other Southern European countries, have different characteristics from those in third world countries and in advanced economies. Therefore, they cannot be fully understood and conceptualized within dualist approaches, or the flexible specialization and post-Fordist theories. The thesis suggests that these approaches cannot explain all the dynamics of small firms and their role in local economic development in the Southern European semi-periphery. Instead, small firms have to be understood for their role in the generation of personal income within family and social networks within the local economies of these countries.
The fieldwork for the thesis is designed to reveal spatial and sectoral dimensions of small firms. l'hree sub-sectors from commerce, manufacturing, and construction were chosen. Three medium-sized cities from three different regions in Turkey were selected as the survey areas. In each survey city, small firm owners, chambers of commerce and industry, training schools and local informants were approached. In total 216 structured questionnaires were conducted with small business owners. In addition, a series of semi-structured interviews and in-depth analyses were developed throughout the field survey.
Research findings show that the city economies in the survey areas are dominated by indigenous small and medium-sized firms. These are important elements for wealth and income generation for entrepreneurs, and their immediate family and relatives. While geographical variations between cities were found to be relatively small, there are significant sectoral differences in terms of role, transformation and change of small businesses. Contrary to the flexibility theory, small firms are not innovative and internationally competitive. They are vulnerable to macro economic problems and policy changes. This survey revealed numerous characteristics of Turkish small firms which are similar to those found by researchers working in other countries. These are the highly personal and unstructured nature of business practice, the informal style of management, and the importance of family and friend involvement and networks. Anthropological aspects and entrepreneurial strategies were found to be very important for the growth and survival of small firms in Turkey in the absence of institutional support and complex business networks. This research opens new channels to investigate small firms in medium-sized cities in the European semi-periphery.
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