Entrepreneurial networking and performance of food and beverages manufacturing SMEs in Uganda; is cost advantage the missing link ?

Purpose The study aimed to investigate the mediating effect of cost advantage on the link between entrepreneurial networking and the performance of food and beverages manufacturing SMEs in central Uganda. Design/methodology/approach This study used a cross-sectional quantitative survey approach where 269 SMEs were sampled through stratified and simple random sampling, data were collected via self-administered questionnaires and analyzed using Smart partial least square-structural equation modelling. Findings Results revealed that a significant positive relationship exists between entrepreneurial networking and performance of food and beverages manufacturing SMEs, with cost advantage partially mediating this relationship. The findings suggest that leveraging critical resources such as technology, raw materials, knowledge and skills, market opportunities and information flow obtained through networks can enhance performance, especially when accessed at lower costs, leading to higher sales and job creation. Research limitations/implications The study focus was on food and beverages manufacturing SMEs leaving out other manufacturing sub-sectors like furniture, soap and foam products, paper, printing, packaging and label. Also the study was carried out in Ugandan context. Practical implications The findings suggest that leveraging critical resources such as technology, raw materials, knowledge and skills, market opportunities and information flow obtained through networks can enhance performance, especially when accessed at lower costs, leading to higher sales and job creation. Originality/value Resource constrained food and beverages manufacturing SMEs need to leverage on their networks for critical resources such as technology, raw materials, market opportunities, information sharing, skills and finance at reduced prices so as to lower their manufacturing costs for improved performance in terms of sales, manufacturing output and employment growth.