Nexus between social capital and performance of micro and small firms in an emerging economy: The mediating role of innovation

Frederick Owusu Agyapong, Ahmed Agyapong and Kofi Poku

Cogent Business & Management, 2017, vol. 4, issue 1, 1309784

Abstract: The purpose of this study was to examine the relationship among social capital, innovation, and performance of micro and small businesses (MSBs) in emerging economies using data from a sub-Saharan African Country—Ghana. Specifically, the study sought to examine the mediating role of innovation in the relationship between social capital and performance. The study relied on a survey design and a cross-sectional data collected with the aid of questionnaire from 500 MSBs operating in the Ashanti Region of Ghana. The scales and measures of the study were validated using confirmatory factory analysis in LISREL 8.50, while the study’s proposed model was estimated using ordinary least square regression analysis in SPSS 20. The following results were obtained: (1) social capital positively influenced performance, (2) there is positive relationship between innovation and performance, (3) social capital has a positive effect on innovation, and (4) innovation was observed to partially mediate the relationship between social capital and performance. The results indicate the important role social capital and innovation play in the success of MSBs in emerging economies and the fact that managers and owners of such businesses need to pay attention to these concepts and use them to their advantage.

Date: 2017
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Citations: View citations in EconPapers (12)

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DOI: 10.1080/23311975.2017.1309784

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