Effect of Social Capital on Firm Performance: The Role of Entrepreneurial Orientation and Dynamic Capability


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Authors

  • Tian Hongyun School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.
  • William Adomako Kankam School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.
  • Florence Appiah-Twum School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.
  • Isaac Gumah Akolgo School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.

Abstract

Social capital is a concept that describes good quality social relations that can lead to mutu­al benefits. The social capital theory thrives on relationships in networks to gain access to resources, especially information benefits not available to non-members of the network. The study reports the effects of social capital on firm performance. The study further examines the moderating role of entrepreneurial orientation in the relationship between social capital and firm performance; and the mediating role of dynamic capabilities in the relationship between social capital and firm performance. Using SmartPLS software 3.2.8  to analyze primary data collected from 787 small and medium-sized enterprises (SMEs) operating in Ghana, the results show that social capital has a positive and direct relationship with firm performance in Ghana. The findings suggest that EO moderates the relationship between social capital and firm performance. Again, dynamic capabilities mediate the relationship between social capital and firm performance. The study also provides managers with practical ways of building relationships within their networks for achieving competitive advantage in the current business environment.Keywords: Social capital, Entrepreneurial Orientation, Dynamic capabilities and firm performanceJEL Classifications: L31, M1DOI: https://doi.org/10.32479/irmm.8108

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Author Biographies

Tian Hongyun, School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.

Tian Hongyun is an Associate Professor, School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.

William Adomako Kankam, School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.

William Adomako Kankam is a PhD candidate, School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.

Florence Appiah-Twum, School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.

Florence Appiah-Twum is PhD candidate, School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.

Isaac Gumah Akolgo, School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.

Isaac Gumah Akolgo is a PhD candidate, School of Management, Jiangsu University, 301 Xuefu Road, Zhenjiang 212013, Jiangsu, P.R. China.

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Published

2019-07-15

How to Cite

Hongyun, T., Kankam, W. A., Appiah-Twum, F., & Akolgo, I. G. (2019). Effect of Social Capital on Firm Performance: The Role of Entrepreneurial Orientation and Dynamic Capability. International Review of Management and Marketing, 9(4), 63–73. Retrieved from https://econjournals.com/index.php/irmm/article/view/8108

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