The Pseudo-Integration of SMEs in Turkey: The Case of MÜSIAD

Although political factors and market conditions in Turkey have tended to stunt the development of small businesses and advantage a coterie of vertically integrated firms based in Istanbul, a group of SMEs—as part of an Islamic business association (MÜSIAD) located in Central and Eastern Anatolia — have defied the odds and proved able to compete against much larger, more diversified rivals. Analysis of a novel dataset challenges existing theories of the success of MÜSIAD members based on Islamic politics or Islamic capital. Instead, I argue that strong feelings of trust among member-firms have allowed them to mimic the structural advantages of vertical integration by sharing valuable market information and entering into flexible, long terms partnerships with one another.