SMEs and institutional theory: major inroads and opportunities ahead

Purpose: The present paper offers a literature review on the application of institutional theory in the context of small and medium-sized enterprises (SMEs). The study aims to synthesize existing research on how institutional factors, both formal and informal, shape the strategic behaviors of SMEs through the lens of new institutionalism and its three strands – rational-action neoinstitutionalism (RAN), social-constructionist neoinstitutionalism (SCN) and mediated-conflict neoinstitutionalism (MCN). It also identifies critical gaps and proposes avenues for future research. Design/methodology/approach: Employing the B-SLR’s multi-method framework, this study integrates bibliometric analysis and a systematic literature review. The analysis examines 202 articles, categorizing them into four key research clusters related to the application of institutional theory to SMEs. Findings: The literature on SMEs and institutional theory is framed around the following clusters: (1) institutional theory and innovation in SMEs, (2) institutional theory and the environmental sustainability of SMEs, (3) institutional theory and the internationalization of SMEs and (4) institutional theory and SME strategies in emerging markets. Originality/value: This study represents the first literature review applying institutional theory to SMEs, offering a framework for understanding how institutional factors influence SME strategic decisions. The paper also identifies research gaps, proposing directions for future studies within each of the four clusters and contributes to bridging the fragmented research on SMEs and institutional theory.