Analysing the composition of the SME sector in high- and low-income regions: Some research hypotheses

Certain qualitative characteristics of the small- and medium-sized enterprises (SMEs) operating within a territory might be essential to explain their macroeconomic impact. From this perspective, this article explores the relationship between the composition of the SME sector and the level of regional economic development. In this regard, a conceptual framework to analyse the composition of SME sectors is proposed considering two key aspects: on the one hand, different dimensions of SMEs’ entrepreneurial orientation – innovation, cooperation, proactivity and quality orientation; and, on the other hand, the role of the external effects resulting from the inter-firm productive linkages within a specific area – differentiating between domestic, dependent, exporting and extravert SMEs. The relationship between these two key aspects is also considered and tested using a multinomial logit model. The empirical analysis uses data from a survey among over 650 SMEs in two Spanish provinces: Barcelona, as an example of a high-income economy, and Seville, as an example of a comparatively backward area.