Project – The Role of Entrepreneurial Networking in the Growth of Women-Owned Businesses: A Study of Selected Enterprises in Abeokuta, Ogun State

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Entrepreneurship has become an important mechanism for employment creation, income generation, innovation and economic development, particularly through the activities of micro, small and medium-sized enterprises. Within this broad entrepreneurial environment, women-owned businesses constitute an important segment because women participate extensively in trading, manufacturing, agriculture, services and other forms of commercial activity. However, the ability of women-owned businesses to survive and grow is influenced by the resources, knowledge, opportunities and relationships available to their owners. Entrepreneurial networking refers to the process through which entrepreneurs establish and maintain relationships with other entrepreneurs, customers, suppliers, financial institutions, government agencies, professional organisations and other relevant stakeholders in order to obtain information, resources, advice and business opportunities. Stam, Arzlanian and Elfring (2014), in a meta-analysis of 61 independent samples, found a positive and significant relationship between entrepreneurs’ social capital and small-firm performance, with network diversity showing particularly important effects. This suggests that entrepreneurial relationships can constitute valuable resources for business development and growth. 

The importance of entrepreneurial networking can be explained through the resource benefits that business owners can obtain from their relationships. Entrepreneurs frequently operate in environments where access to finance, market information, technology, managerial expertise and business opportunities may be limited. Networks can provide avenues through which entrepreneurs obtain referrals, identify suppliers and customers, exchange knowledge, access professional advice and discover new market opportunities. Hoang and Antoncic (2003) emphasised that network-based research is important to entrepreneurship because entrepreneurial activities are embedded in social relationships and exchanges. Similarly, Stam et al. (2014) established through meta-analytic evidence that the social capital embedded in entrepreneurs’ networks is positively associated with small-firm performance. Entrepreneurial networking can therefore be understood not merely as social interaction but as a potential business resource through which entrepreneurs acquire and mobilise resources necessary for enterprise development. 

Networking is particularly relevant to women-owned businesses because women entrepreneurs may encounter institutional, financial, social and market barriers that affect their ability to establish and expand their enterprises. Research has shown that networking can provide women entrepreneurs with access to information, resources, business contacts, mentorship and opportunities that may otherwise be difficult to obtain individually. Watson (2012), using data on male- and female-controlled small and medium-sized enterprises, found that formal and informal networks were associated with firm survival, while formal networks were associated with business growth. More specifically, Singh and Kovid (2023) examined women entrepreneurs and found that networking competencies formed an important part of the relationship between entrepreneurial characteristics and firm performance. These findings indicate that the quality and utilisation of business relationships may be particularly important for women entrepreneurs seeking to overcome resource and market constraints. 

In Nigeria, entrepreneurial networking has become increasingly relevant because many businesses operate within environments characterised by information gaps, limited access to finance, competition and infrastructural constraints. Women entrepreneurs may use social, professional, community and business networks to obtain financial information, access markets, learn from other entrepreneurs and develop relationships that support business activities. Ademola, Adegboyegun and Adegoke (2020) examined 348 women entrepreneurs in Nigeria and found that social networking had a positive and significant effect on the performance of women entrepreneurs. Their study further reported that network size, network diversity and network resources had positive and significant relationships with entrepreneurial performance, although network strength showed a weaker relationship. The authors consequently argued that women entrepreneurs require not only financial resources and skills but also social networks through which additional resources and opportunities can be accessed. 

Entrepreneurial networking may also contribute to business growth by facilitating access to strategic alliances, partnerships and innovative resources. Small businesses often lack the financial and human resources required to independently develop new products, enter new markets or acquire specialised knowledge. Relationships with other businesses and stakeholders can therefore provide opportunities for collaboration and resource sharing. Anyanwu, Oloto and Nwokocha (2023), in their study of women-owned enterprises in Nigeria, found that strategic alliances could provide access to resources, talents and techniques that support innovation. Similarly, Sajuyigbe, Eniola, Ayeni and Oladejo (2020) identified networking and social inclusion among the factors relevant to the performance of women-owned SMEs in Southwest Nigeria. These findings indicate that entrepreneurial networking can extend beyond informal social relationships to include strategic business relationships that may contribute to enterprise development, innovation and competitive capability. 

The relevance of networking is particularly important in Ogun State, where women participate in various forms of entrepreneurial activity across trading, manufacturing, services, agriculture and other sectors. Studies conducted within the state have documented both the contribution and challenges of women entrepreneurs. Adeoye, Olajide-Arise and Egwakhe (2018), in a study of female venture owners in Remo, Ogun State, found that gender disparity, inadequate family support and socio-cultural factors affected the survival of female entrepreneurs. More recently, Aderounmu, Babarinde and Igbadumhe (2024), whose study included researchers based at Moshood Abiola Polytechnic in Abeokuta, examined women entrepreneurs in Ogun State and reported that e-commerce provided new opportunities for women to overcome some traditional socio-cultural barriers while improving access to markets and networks. These findings demonstrate that women’s enterprises in Ogun State operate within an environment in which relationships, access to markets and support mechanisms can be important to business development. 

Abeokuta, as the capital and a major commercial centre of Ogun State, provides an appropriate setting for examining the role of entrepreneurial networking in the growth of women-owned businesses. Women entrepreneurs in the metropolis operate in different commercial environments and interact with customers, suppliers, financial institutions, business associations, government agencies and other entrepreneurs. These interactions can provide opportunities for information exchange, referrals, access to markets, mentorship, partnerships and other forms of business support. Evidence from Nigerian research indicates that network size, diversity and access to network resources can be positively associated with women entrepreneurs’ performance, while evidence from Ogun State shows that women-owned businesses continue to face challenges relating to support, socio-cultural conditions and access to opportunities. Therefore, examining entrepreneurial networking among selected women-owned enterprises in Abeokuta can provide location-specific evidence on whether networking relationships contribute to business growth through increased sales, customer expansion, profitability, market expansion and business sustainability (Ademola et al., 2020; Adeoye et al., 2018; Aderounmu et al., 2024). 

1.2 Statement of the Problem

Women-owned businesses constitute an important component of entrepreneurial activity, yet many women entrepreneurs continue to experience difficulties that can constrain business survival and growth. These difficulties may include limited access to finance, insufficient market information, inadequate managerial support, socio-cultural restrictions and difficulty accessing productive business resources. In Ogun State, Adeoye, Olajide-Arise and Egwakhe (2018) found that gender disparity, poor family support and socio-cultural factors affected the survival of female entrepreneurs in Remo. Similarly, Sajuyigbe et al. (2020) noted that women entrepreneurs can experience marginalisation and exclusion from financial, networking and other forms of support. These challenges raise the question of whether entrepreneurial networking can provide women-owned businesses with additional resources and opportunities capable of supporting their growth. 

A second problem relates to the extent to which women entrepreneurs are able to utilise their existing relationships for productive business purposes. Having many social contacts does not necessarily mean that an entrepreneur has access to useful business resources. The value of a network may depend on its size, diversity, strength, quality and the resources embedded within it. Ademola, Adegboyegun and Adegoke (2020) found that network size, diversity and network resources were positively and significantly related to the performance of women entrepreneurs in Nigeria, whereas network strength demonstrated a weaker relationship. Stam et al. (2014) similarly found that network diversity was an important moderator of the relationship between entrepreneurial social capital and small-firm performance. This suggests that simply belonging to social groups may not be sufficient; the nature and usefulness of entrepreneurial relationships may determine whether networking translates into tangible business outcomes. 

A further problem is that women-owned businesses may have limited access to formal business networks and strategic partnerships that could facilitate market expansion, innovation and access to resources. Research on Nigerian women-owned enterprises has shown that strategic alliances can provide access to resources, expertise and techniques that support innovation. However, women entrepreneurs may still encounter barriers that limit their participation in broader business networks. Aderounmu, Babarinde and Igbadumhe (2024) observed that digital commerce created opportunities for women entrepreneurs in Ogun State to overcome some traditional barriers and gain greater access to markets and networks, while Adeoye et al. (2018) documented socio-cultural and support-related challenges among female entrepreneurs in Ogun State. The persistence of these constraints creates a need to investigate whether entrepreneurial networking is sufficiently available and useful to women-owned enterprises operating in Abeokuta. 

The specific research problem, therefore, is the limited empirical understanding of how entrepreneurial networking influences the growth of women-owned businesses in Abeokuta, Ogun State. Although Nigerian studies have established relationships between social networking and women entrepreneurs’ performance, and studies in Ogun State have examined women’s business survival, digital marketing and socio-cultural challenges, there remains a need for a focused study linking specific networking dimensions with business growth among selected women-owned enterprises in Abeokuta. In particular, it is necessary to examine whether network size, network diversity, access to business information and access to business opportunities influence indicators of business growth such as sales growth, customer expansion, profitability, market expansion and sustainability. Such evidence can contribute to a clearer understanding of the business value of entrepreneurial networking within the local context (Ademola et al., 2020; Adeoye et al., 2018; Wambui & Muathe, 2023). 

1.3 Aim and Objectives of the Study

The main aim of this study is to examine the role of entrepreneurial networking in the growth of women-owned businesses in Abeokuta, Ogun State.

The specific objectives are to:

1. examine the influence of network size on the growth of women-owned businesses in Abeokuta, Ogun State;
2. determine the influence of network diversity on the growth of women-owned businesses in Abeokuta, Ogun State;
3. assess the influence of access to business information through entrepreneurial networks on the growth of women-owned businesses in Abeokuta, Ogun State; and
4. examine the influence of access to business opportunities through entrepreneurial networking on the growth of women-owned businesses in Abeokuta, Ogun State.

1.4 Research Questions

The following research questions will guide the study:

1. To what extent does network size influence the growth of women-owned businesses in Abeokuta, Ogun State?
2. What influence does network diversity have on the growth of women-owned businesses in Abeokuta, Ogun State?
3. To what extent does access to business information through entrepreneurial networks influence the growth of women-owned businesses in Abeokuta, Ogun State?
4. What influence does access to business opportunities through entrepreneurial networking have on the growth of women-owned businesses in Abeokuta, Ogun State?

1.5 Research Hypothesis

The following null hypothesis will be tested at a 0.05 level of significance:

H₀: Entrepreneurial networking has no statistically significant influence on the growth of women-owned businesses in Abeokuta, Ogun State.

1.6 Significance of the Study

The study will be significant to women entrepreneurs because it will provide empirical information on the extent to which business relationships and networking activities can contribute to enterprise growth. The findings may help women business owners understand the potential value of developing relationships with other entrepreneurs, customers, suppliers, professional organisations, financial institutions and other relevant stakeholders.

The study will also be useful to business associations and entrepreneurial support organisations. Such organisations may use the findings to design networking programmes, mentorship initiatives, business forums, collaborative platforms and information-sharing mechanisms specifically suited to the needs of women entrepreneurs.

The study will be relevant to government agencies and policymakers concerned with entrepreneurship development and women’s economic participation. Evidence concerning the relationship between entrepreneurial networking and business growth may assist policymakers in designing programmes that move beyond financial assistance to include networking, mentoring, market linkage and business-support mechanisms.

Financial institutions may also benefit from the study because entrepreneurial networks can provide entrepreneurs with information concerning financial products, savings opportunities, credit facilities and other financial services. The findings may encourage financial institutions to engage more closely with women entrepreneur associations and business networks when designing products and outreach programmes.

The study will further benefit women-focused non-governmental organisations and development agencies. The findings may provide evidence for programmes aimed at improving women’s access to markets, business information, entrepreneurial knowledge and strategic partnerships.

Finally, the study will contribute to the academic literature on entrepreneurship, social capital, networking and women-owned businesses. It will provide empirical evidence from Abeokuta, Ogun State, and may serve as a reference for researchers undertaking related studies on entrepreneurial networking, women entrepreneurship, SME growth and business performance.

1.7 Scope of the Study

The study focuses on the role of entrepreneurial networking in the growth of women-owned businesses in Abeokuta, Ogun State.

The independent variable is entrepreneurial networking, operationalised through network size, network diversity, access to business information and access to business opportunities. The dependent variable is business growth, which will be examined through indicators such as sales growth, customer expansion, profitability, market expansion and business sustainability.

Geographically, the study is restricted to selected women-owned enterprises operating within Abeokuta, Ogun State. The study will focus on women who own and actively manage businesses within the selected study area.

1.8 Operational Definition of Terms

Entrepreneurship: The process of identifying opportunities, organising resources and establishing and managing a business venture with the objective of creating value and generating economic returns.

Entrepreneurial Networking: The process through which business owners establish, develop and maintain relationships with individuals and organisations that can provide business information, resources, advice, markets, finance, partnerships or other forms of entrepreneurial support.

Women-Owned Business: A business that is owned and substantially controlled by a woman or women and in which women exercise significant responsibility for major business decisions.

Network Size: The number of individuals, organisations, businesses and other relevant contacts with whom a woman entrepreneur maintains relationships for personal or business purposes.

Network Diversity: The extent to which an entrepreneur’s network consists of contacts from different backgrounds, occupations, industries, institutions, markets and professional or social groups.

Business Information: Relevant knowledge obtained through entrepreneurial networks concerning markets, customers, suppliers, prices, technology, regulations, finance, competitors and other issues that can affect business decisions.

Business Opportunities: Potential commercial possibilities obtained through entrepreneurial networks, including new customers, suppliers, contracts, partnerships, markets, investments and business referrals.

Business Growth: The improvement or expansion of a business over time, measured through indicators such as sales, profitability, number of customers, market coverage, assets, employees and business sustainability.

Business Performance: The extent to which a business achieves its intended economic and operational objectives, including profitability, sales, customer acquisition and market expansion.

Women Entrepreneurs: Women who identify business opportunities, establish or own enterprises and participate actively in the management and decision-making processes of those enterprises.

Abeokuta Metropolis: The urban and commercial area of Abeokuta in Ogun State, Nigeria, within which the selected women-owned enterprises for the study are located.

Project – The Role of Entrepreneurial Networking in the Growth of Women-Owned Businesses: A Study of Selected Enterprises in Abeokuta, Ogun State