Social capital in small industrial firms and its link with innovation

Abstract

Introduction: Social Capital in organizations is an intangible asset that represents the favourable relationships that exist between work teams, within an organization and externally, to different interest groups.Objective: This study examined the link between internal relational social capital (RSC) and external RSC with innovation in small industrial firms in Tabasco, Mexico. There was also an inquiry into how much internal RSC and external RSC explain innovation. Methods: The design was nonexperimental, cross-sectional, descriptive, correlational, and explanatory. Linear regression analysis was used.Results: Significant positive relationships was identified between internal RSC and external RSC and innovation. The internal RSC and external RSC contributed significantly to the explaining of innovation. Areas of opportunity were identified for these firms in process design and formal research activities for new raw materials, production procedures and patent generation. Conclusion: To promote innovation, managers of small industrial companies must continue to establish strategies and practices to strengthen RSC.