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

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  • Frederick Owusu Agyapong
  • Ahmed Agyapong
  • Kofi Poku

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.

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  • Frederick Owusu Agyapong & Ahmed Agyapong & Kofi Poku, 2017. "Nexus between social capital and performance of micro and small firms in an emerging economy: The mediating role of innovation," Cogent Business & Management, Taylor & Francis Journals, vol. 4(1), pages 1309784-130, January.
    • Handle: RePEc:taf:oabmxx:v:4:y:2017:i:1:p:1309784
    DOI: 10.1080/23311975.2017.1309784
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    2. Zhonghao Wang, 2023. "Do Livelihood Strategies Influence Post-Epidemic Business Performance? Investigation of Social Capital and Environmental Perception," Sustainability, MDPI, vol. 15(5), pages 1-12, March.
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    4. Samuel Afriyie & Jianguo Du & Abdul-Aziz Musah, 2019. "Innovation and marketing performance of SME in an emerging economy: the moderating effect of transformational leadership," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-25, December.
    5. Say Keat Ooi & Chan Hua Lee & Azlan Amran, 2023. "Assessing the influence of social capital and innovations on environmental performance of manufacturing SMEs," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 3242-3254, November.
    6. Juan-Gabriel Martínez-Navalón & María Fernández-Fernández & Fernanda Pedrosa Alberto, 2023. "Does privacy and ease of use influence user trust in digital banking applications in Spain and Portugal?," International Entrepreneurship and Management Journal, Springer, vol. 19(2), pages 781-803, June.
    7. Fabiane Tubino Garcia & Carla Schwengber ten Caten & Elaine Aparecida Regiani de Campos & Aline Marian Callegaro & Diego Augusto de Jesus Pacheco, 2022. "Mortality Risk Factors in Micro and Small Businesses: Systematic Literature Review and Research Agenda," Sustainability, MDPI, vol. 14(5), pages 1-37, February.
    8. Rajapakshe, PSK & Gamage, SKN & Prasanna, RPIR & Jayasundara, JMSB & Ekanayake, EMS & Upulwehera, JMHM & Wijerathna, WAID & Abeyrathne, GAKNJ, 2020. "Social Capital, Performance of SMEs, and COVID-19 Pandemic," MPRA Paper 109530, University Library of Munich, Germany, revised 30 Aug 2020.
    9. Fu, Xiaolan & Mohnen, Pierre & Zanello, Giacomo, 2018. "Innovation and productivity in formal and informal firms in Ghana," Technological Forecasting and Social Change, Elsevier, vol. 131(C), pages 315-325.
    10. HMJCB Heenkenda & Fengju Xu & KMMCB Kulathunga & WAR Senevirathne, 2022. "The Role of Innovation Capability in Enhancing Sustainability in SMEs: An Emerging Economy Perspective," Sustainability, MDPI, vol. 14(17), pages 1-22, August.
    11. Tian Hongyun & William Adomako Kankam & Florence Appiah-Twum & Isaac Gumah Akolgo, 2019. "Effect of Social Capital on Firm Performance: The Role of Entrepreneurial Orientation and Dynamic Capability," International Review of Management and Marketing, Econjournals, vol. 9(4), pages 63-73.

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