The Usage and Social Capital of Mobile Phones and their Effect on the Performance of Microenterprise: An Empirical Study

The purpose of this study is to uncover the impacts of mobile phone use on the performance of micro-enterprises (MEs) in Bangladesh, a developing country where the total number of mobile subscriptions reached around 131.38 million by the end of June in 2016 with penetration rate of 81 percent. Data were collected from owners of MEs through face to face interview. A multivariate analysis and SPSS macro developed by Preacher and Hayes were used as statistical techniques to assess the effects of mobile phone use. Results of the study indicate that micro-enterprises which owners were using mobile phone were having significantly greater benefits and financial performance compared to counterparts. A significant direct relationship between mobile phone use, and social capital and ME‟s financial and non-financial performances was found. A further investigation revealed that financial performance is also indirectly related to social capital and quality and enterprise processes, which are significantly influenced by mobile phone usage. Therefore social capital and non-financial business performances are involved in the mediational process between the financial performance of MEs and use of mobile phone. The novelty of this research lies in the establishment of, for the first time, high level statistical relationship between the use of mobile phone, its mediating factors and financial performance of MEs. The findings will assist micro-entrepreneurs and policy makers in taking right courses of action that make the implementation of this device more effective.