Social Capital and Firm Performance: Moderating Effect of Environmental Turbulence

Pratono, Aluisius Hery; Mahmood, Rosli

doi:10.5539/ass.v10n19p59

Cited by 27 publications

(16 citation statements)

References 54 publications

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“…Challenges Faced by SMEs in Embracing Innovation: Innovation generally requires organisations to transform knowledge capital to innovation outputs, such as new and improved quality products or processes, organisational or marketing changes (Pratono, 2014). Therefore, SMEs need to invest in knowledge capital to ensure that they increase their innovation capabilities.…”

Section: Small and Medium Enterprises (Smes)mentioning

confidence: 99%

The Impact of Environmental Turbulence on Product Innovation in Small to Medium Enterprises in Harare, Zimbabwe

Zimuto

Sandada

Chuchu

et al. 2019

JEBS

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The purpose of the research was to examine the impact of environmental turbulence on product innovations in small to medium enterprises (SMEs). In the study environmental turbulence consisted of five dimensions namely, supplier turbulence, technological turbulence, market turbulence, regulatory turbulence and competitive intensity. A cross-sectional quantitative research design was adopted in the study. The study sample was drawn from a pool of 3,000 SMEs both unregistered and registered with the Ministry of Small and Medium Enterprises in Harare, Zimbabwe. In the study, a total of 200 completed surveys were obtained and analysed. To analyse the research data SPSS23 was utilised. Regression analysis was carried out to establish the cause-and-effect relationship between the independent and dependent variables in the study. The findings of the study showed that technology turbulence and competitive intensity had a statistically significant positive impact on product innovation. Market turbulence was noted as having a statistically significant negative impact on product innovativeness. The main implications established in the study were that SMEs should introduce mechanisms to manage and mitigate market, supplier and regulatory turbulence to ensure that their levels of product innovativeness remain positive.

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Section: Small and Medium Enterprises (Smes)mentioning

confidence: 99%

The Impact of Environmental Turbulence on Product Innovation in Small to Medium Enterprises in Harare, Zimbabwe

Zimuto

Sandada

Chuchu

et al. 2019

JEBS

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“…For example, Batjargal (2003) finds that relational embeddedness and resource embeddedness have direct positive impacts on firm performance, whereas structural embeddedness has no direct impacts on performance, based on interviews with 75 Russian entrepreneurs in 1995 and 1999. Pratono and Mahmood (2014) finds that resource embeddedness, rather than relational embeddedness has significant positive impact on firm performance based on interviews with 700 respondents published by the Surabaya government in Indonesia.…”

Section: Literaturementioning

confidence: 99%

Can social capital explain business performance in Denmark?

Wang

Steiner

2019

Empir Econ

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Motivated by the limited evidence on the positive link between social capital and firm performance, this paper explores this potential driver of firm performance at the firm rather than macro-level by employing a novel approach: we capture social capital at a community level rather than focus on the narrow aspect of entrepreneurs' own social network. Using Principal Component Analysis to aggregate various trust, norm, and network related variables to construct social capital variables with more than 150,000 firm-level observations for firm performance variables, this paper identifies an overall positive and significant effect of social capital on firm performance in Denmark. These effects are robust to firm-level social capital measures, different sampling years and alternative measures of firm performance (return on asset, current ratio, solvency ratio and profit margin) and network (Putnam and Olson groups).

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“…Some authors such as Rosli and Sidek (2013) have studied the mediating effect of innovation on the performance of SMEs in Malaysia, Ismail et al (2014) studied the role of innovation on SMEs in the manufacturing and service sectors in Malaysia. Others such as Pratono and Mahmood (2016) studied the entrepreneurial ecosystem and sought to establish the moderating effect of environmental turbulence and mediating effect of market capability in the connection between entrepreneurial orientation (EO) and firm performance. None so far, however, have studied the combination of innovation and operating business environment as mediating and moderating effects respectively, on social capital and firm performance.…”

Section: Statement Of the Problemmentioning

confidence: 99%

“…None so far, however, have studied the combination of innovation and operating business environment as mediating and moderating effects respectively, on social capital and firm performance. Pratono and Mahmood (2016) further applied quantitative technique with cross-sectional data design, which has been known to limit the study by giving barely a snapshot observation that may not be relied upon. It is on this basis that this study was conceptualized to address the gaps by seeking to understand and critique earlier work on this matter, with a view to provide further insights and contribute to the knowledge for policy makers and stakeholders to enhance the resources available and yield better outcomes.…”

Section: Statement Of the Problemmentioning

confidence: 99%

Nexus between Social Capital and Firm Performance: A Critical Literature Review and Research Agenda

Kanini¹,

Muathe²

2019

IJBM

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Given the importance of social capital in entrepreneurial success and growth, understanding how it can be exploited for optimal performance of the venture becomes critical. While the Government of Kenya, in recognition of the importance of entrepreneurial ventures in driving the economy, has put in both structural and affirmative measures towards enhancement of social capital and support for entrepreneurs, performance of these businesses still remains significantly low. The objectives of this study were to discuss the key constructs, variables and perspectives underlying the conceptualization of social capital and performance, and the arising controversies. Additionally, the study sought to discuss key methodological issues emerging from existing empirical studies, highlight critical knowledge gaps emanating from critical review of the literature and suggest a robust conceptual framework to guide a further study that would address the highlighted knowledge gaps. This study is anchored on the social capital theory which strongly considers social capital as an essential form of capital; one that no business can ignore and expect to survive or thrive. Other supporting theories include the contingency theory, economic theory, anthropological theory and innovation theories. Among the major gaps identified by this study include methodological gaps; most studies reviewed used descriptive design which is known to be the weakest in establishing cause and effect relationships. Some of the studies had very small sample sizes, known to potentially increase errors. Other gaps include contextual gaps; most of the studies considered established businesses where operations tend to be more standardized and innovation is adequately funded, unlike the low income areas where resources are often limited. Conceptual gaps were identified among studies that used direct relationships. For a broader and deeper appreciation of the relationship between social capital and performance, this study recommends conceptualization of a future study whereby the mediating effect of innovation and the moderating effect of operating business environment are considered, preferably within a low income area with less established / informal businesses within the service sector.

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Social Capital and Firm Performance: Moderating Effect of Environmental Turbulence

Cited by 27 publications

References 54 publications

The Impact of Environmental Turbulence on Product Innovation in Small to Medium Enterprises in Harare, Zimbabwe

The Impact of Environmental Turbulence on Product Innovation in Small to Medium Enterprises in Harare, Zimbabwe

Can social capital explain business performance in Denmark?

Nexus between Social Capital and Firm Performance: A Critical Literature Review and Research Agenda

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