The SME ecosystem: An empirical analysis of internal and external factors shaping firm performance

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Abstract

Small and medium-sized enterprises (SMEs) play a pivotal role in Albania’s economic development. Yet, their performance remains constrained by fragmented institutional support, limited managerial capacities, and uneven access to intermediary services. This study addresses these challenges by examining how internal and external ecosystem factors influence SME performance. Grounded in the entrepreneurial ecosystem approach of Stam and Spigel (2016) and van de Ven (1993), as conceptualized in the integrated framework of Stam and van de Ven (2019), the research explores how system conditions, framework conditions, and outputs interact to shape enterprise outcomes. Using a multiple linear regression (MLR) model, the analysis is conducted in two stages: first, to assess the aggregate influence of ecosystem factors at the macro level, and second, to identify the most impactful variables driving firm competitiveness and growth. The results demonstrate that human capital, managerial skills, and professional development, along with institutional quality, networks, market demand, cultural norms, and intermediary services, have statistically significant effects on SME performance. Among these, intermediary services and human capital emerge as the strongest determinants. The findings highlight that firm performance is a multidimensional outcome shaped by the interdependence of internal and external ecosystem components. The study provides empirical evidence supporting the ecosystem-based understanding of SME competitiveness and offers actionable insights for policymakers to enhance resilience, innovation, and sustainable growth in emerging economies.

Keywords: SMEs, Business Performance, Internal Factors, External Factors, Linear Regression, SME Ecosystem

Authors’ individual contribution: Conceptualization — R.A.; Methodology — R.A. and G.Ç.; Software — R.A. and G.Ç.; Validation — L.M. and S.F.; Formal Analysis — R.A. and G.Ç.; Investigation — R.A. and G.Ç.; Resources — L.M. and S.F.; Data Curation — R.A. and G.Ç.; Writing — Original Draft — R.A. and G.Ç.; Writing — Review & Editing — R.A. and G.Ç.; Visualization — R.A. and G.Ç.; Supervision — L.M. and S.F.; Project Administration — L.M. and S.F.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C30, L26, M13, O16, R11

Received: 08.05.2025
Revised: 12.08.2025; 10.10.2025; 21.10.2025
Accepted: 11.11.2025
Published online: 13.11.2025

How to cite this paper: Alite, R., Çeka, G., Milo, L., & Fortuzi, S. (2025). The SME ecosystem: An empirical analysis of internal and external factors shaping firm performance. Business Performance Review, 3(2), 94–104. https://doi.org/10.22495/bprv3i2p8