Business networks and cooperation in small business relationships.

It has been widely recognized that small businesses constitute an important sector in the Tanzania economy. The aim of this study was to examine whether cooperative relationships among small businesses can contribute towards their profitability. A LISREL model that analyses cooperation in small business relationships between suppliers and customer firms was tested. The model is fitted to empirical data obtained from a survey of 120 small business entrepreneurs located in the three districts of Dar es Salaam region. With the help of a LISREL-based structural model three hypotheses were tested. The analysis shows that relationship profitability is directly affected by relationship commitment and, indirectly through commitment, by business network connection.