An Institutionalist Approach to SMEs: The Role of Power Relations and Transaction Costs

The article attempts to combine Alfred Eichner’s institutionalist theory of the megacorp and a corresponding definition small medium-sized enterprises (SMEs) with transaction cost (TCT) based on firms’ asset specificity. We have identified three types SMEs: subcontracting SMEs as “spokes” within hub-megacorp network, independent local competitors megacorps, partners in cluster networks. outlines some distinctive features then concentrates SMEs, presenting their submission megacorp’s power through mark-down pricing consequent inability grow. mention illustrative examples from Slovenia, transition economy, which many been part international megacorps’ supply chains. conclude that TCT, spite its neoclassical paradigmatic background, enriches approach without changing evolutionary character, inherited old institutionalism.