SMEs and public procurement: engaged or stranged?

Using the concept of mixed embeddedness and related literatures, this paper examines the interplay of institutional environment, the public procurement and small firm resource contexts influence on strategic choice of small firms to engage or not engage with the public sector market. Empirically the paper draws on interviews with 20 directors of small firms and desk research. The study findings show the complex interplay of these three factors shaping firms’ strategic choice to engage or not to engage with the public sector market but the extent to which these factors influence varied across firms. Moreover, the perceived risk of tendering for the public sector is found to be more important in shaping the non-engagement choice by some firms than the product market conditions.