Social capital and performance of SMEs: The role of entrepreneurial orientation and managerial capability

Abstract

This study proposes and investigates the argument that social capital–performance link is mediated by entrepreneurial orientation (EO) and that this mediated relationship is dependent upon the level of managerial capability (MC) present in a firm. The study uses a sample of 206 SMEs based in the sub-Saharan African economy. Mainly supporting conjectural predictions, the study indicates that EO intervenes the social capital (SC) effect on performance, with same effects uniquely strengthened according to the dimension of EO in question at higher levels of MC. The study expands our understanding of how the umpiring role of EO in the SC–performance link is contingent upon levels of MC present. Managers are, therefore, encouraged to strategically develop both EO and MC to enable them to effectively utilize and profit from the benefits SC has to offer.