Power, enterprise and employment growth in Australian small- and medium-sized manufacturing firms

Over recent years, there has been a renewed interest in the nature of the relationships between firms, and the ways in which these might contribute to processes of local and regional economic development. A significant body of literature suggests that local growth is often derived from social ties that bind firms together through trust, reciprocity, loyalty and forbearance. While there appears to be consensus in the literature that such relationships are important, there remain doubts in some sections of economic geography about two key elements of this institutionalist model. The first concerns the unequal power relationships that often exist between enterprises and the implications of these asymmetries for the performance of firms and localities. The second relates to the implied significance of geographical proximity whereby close spatial ties between firms are considered to be an important determinant of local competitiveness and economic performance. This article explores these issues through an empirical analysis of the transactional structures of 184 firms in Australia's manufacturing sector.