How Local Knowledge, Networks, and Pride Drive Sourcing Decisions in Small Firms

What is it about?

This study examines why decision makers in small and medium-sized enterprises (SMEs) choose to source locally, focusing on how local expertise, community ties, and patriotic values influence these choices. Drawing on the attention-based view of the firm, it argues that decisions—such as whether a restaurant buys local wines—depend not only on cost or efficiency but also on leaders’ personal resources and values, including location-specific human and social capital and a sense of national pride. Based on data from Ontario-based restaurants, the study provides evidence for the enabling role of both location-specific resources and patriotism in promoting local sourcing. Decision makers who possess strong local knowledge and deep community ties are more inclined to rely on local suppliers. Furthermore, patriotism invigorates the role of social connections, strengthening the positive influence of local networks on sourcing behavior. Together, these findings show that local sourcing is motivated not only by strategic concerns but also by a sense of identification with one’s place and people. For practitioners and policymakers, these insights highlight the importance of building locally embedded knowledge and strong community networks among SME decision makers, while also nurturing pride in regional and national identity. Programs that encourage collaboration among local suppliers, knowledge exchange within industries, and celebration of local heritage can reinforce sustainable sourcing practices and regional economic vitality.

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Photo by Helena Lopes on Unsplash

Photo by Helena Lopes on Unsplash

Why is it important?

This study contributes to a deeper understanding of how individual decision makers’ experiences and values shape organizational choices, particularly in smaller firms where such personal factors often carry greater weight. By combining location-specific human and social capital with patriotic identification, it clarifies how local expertise, trusted relationships, and a shared sense of belonging work together to promote local sourcing. At a time when global supply chains face growing uncertainty, these findings underscore that decision makers who are knowledgeable, connected, and proud of their communities can drive more sustainable, locally rooted business practices—benefiting both their firms and the regions they serve.