SMEs in developing countries and institutional challenges in turbulent environments

The environment in developing countries has undergone significant changes both in macroeconomic and microeconomic terms. At the microeconomic level, SMEs have been affected severely by competitive and mode of governance transformations (Habaradas, 2008; Benzing et al. 2009). Mawardi et al. (2011) see SMEs as engines of economic growth and main contributors to the creation of sustainable jobs and the generation of added value. Zahra and George (1999) argue that SMEs in developing countries must respond to their environment, both economic and institutional. They are exposed to a turbulent institutional environment and to severe international competition.