The impact of external support on microbusinesses’ strategic renewal

Abstract. The study explores whether external support, provided to microbusinesses through business support services, effectively facilitates companies’ strategic renewal and improves firm performance. It uses data collected through questionnaires submitted to a group of firms participating in a project developed by a trade association and privately funded and a matched control group. The project aimed to increase microbusinesses’ competitive potential and contrast the consequences of the unfavourable external environment. A quasi-experimental research design compared the changes observed in firms involved in the project and a control group of firms with similar characteristics, to test the impact of the external support intervention on microbusinesses’ strategic renewal using a control group for both pre- and post-intervention periods. Findings show that participation in the project contributed positively to strategic renewal. This, in turn, had a significant positive effect on financial performance. This study contributes to the literature on the antecedents of strategic renewal, examining the impact of the exposure to external stimuli, such as the ones favoured by the project, on microbusinesses’ entrepreneurial orientation, organizational learning, and social capital. It also contributes to understanding external support mechanisms’ effectiveness in mitigating structural limitations hindering manufacturing SMEs’ success. Among the study’s limitations, the sample size is limited due to the feasibility of involving and following in the project a higher number of firms. Then, little is known about the impact’s persistence after the project’s end, which should be investigated.