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New Insights into Non-Listed Family SMEs in Spain: Board Social Capital, Board Effectiveness, and Sustainable Performance

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  • Valeriano Sanchez-Famoso

    (Financial Economics I Department, University of the Basque Country UPV/EHU, 48008 Bilbao, Spain)

  • Jorge-Humberto Mejia-Morelos

    (Department of Entrepreneurship and Innovation, HEC Montreal, Montreal, QC H3T 2A7, Canada)

  • Luis Cisneros

    (Department of Entrepreneurship and Innovation, HEC Montreal, Montreal, QC H3T 2A7, Canada)

Abstract

This study proposes an original structural model that analyzes the relationship between sustainable firm performance, and a board of directors’ external and internal social capital. Data collected in 232 non-listed and family-run small and medium-sized enterprises in Spain suggest that the effects of boards’ internal and external social capital on sustainable firm performance were partially transmitted through board effectiveness. However, external social capital influences board effectiveness and sustainable firm performance more than internal social capital. Moreover, interlocks only reinforce the relationship between a board’s external social capital and its effectiveness. Our research offers the following main contributions: (1) A proposed structural theoretical model, (2) a focus on both internal and external social capital, unlike previous literature that emphasized only one perspective, and (3) empirical evidence that supports literature on the interlocking interaction between a boards’ internal and external social capital.

Suggested Citation

  • Valeriano Sanchez-Famoso & Jorge-Humberto Mejia-Morelos & Luis Cisneros, 2020. "New Insights into Non-Listed Family SMEs in Spain: Board Social Capital, Board Effectiveness, and Sustainable Performance," Sustainability, MDPI, vol. 12(3), pages 1-18, January.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:3:p:814-:d:311855
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    References listed on IDEAS

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