IDEAS home Printed from https://ideas.repec.org/a/khe/scajes/v5y2019i4p78-87.html
   My bibliography  Save this article

Do Social Capital and Small and Medium Enterprise Factors Influence the Performance of Small Businesses? Empirical Evidence from Emerging Economy

Author

Listed:
  • Habibu Sani
  • Shazida Jan Bt. Mohd-Khan
  • Mohd Saifoul Zamzuri B. Noor

Abstract

This study intends to explore the influence of social capital and SMEs factors on the performance of Small Medium Enterprises (SMEs) in an emerging economy. The huge challenges that SMEs sector faced as a result of the difficulty in accessing finance, shortage of infrastructure, capital accumulation, inadequate personal savings, low level of experience, and innovative technology have motivated this study. Two-stage sampling technique was used to select 139 SMEs as a sample in the two States of North-Western Nigeria (Sokoto and Zamfara). The data for this study were gathered through the means of an online survey. Using the method of Ordinary Least Square (OLS) the findings indicated a significant positive influence amongst networking, technological innovation, and the number of employees with SMEs performance. However, trust has a significant negative relationship with SMEs performance. Accordingly, the findings reveal an inverse relationship between social ties and SMEs performance, which is insignificant in explaining the relationship. The study recommended an execution of social capital aspects and other SMEs factors through adoption of an application of effective strategy, for better outcomes in relation to the performance of SMEs in emerging economies.

Suggested Citation

  • Habibu Sani & Shazida Jan Bt. Mohd-Khan & Mohd Saifoul Zamzuri B. Noor, 2019. "Do Social Capital and Small and Medium Enterprise Factors Influence the Performance of Small Businesses? Empirical Evidence from Emerging Economy," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(4), pages 78-87, December.
    • Handle: RePEc:khe:scajes:v:5:y:2019:i:4:p:78-87
    as

    Download full text from publisher

    File URL: http://www.ajes.ro/wp-content/uploads/AJES_article_1_291.pdf
    Download Restriction: no
    File URL: http://www.ajes.ro/wp-content/uploads/AJES_article_1_291.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Murphy, James T., 2002. "Networks, Trust, and Innovation in Tanzania's Manufacturing Sector," World Development, Elsevier, vol. 30(4), pages 591-619, April.
    2. Robson, Paul J A & Bennett, Robert J, 2000. "SME Growth: The Relationship with Business Advice and External Collaboration," Small Business Economics, Springer, vol. 15(3), pages 193-208.
    3. Musteen, Martina & Francis, John & Datta, Deepak K., 2010. "The influence of international networks on internationalization speed and performance: A study of Czech SMEs," Journal of World Business, Elsevier, vol. 45(3), pages 197-205, July.
    4. Panida Rujirawanich & Ramzi Addison & Clive Smallman, 2011. "The effects of cultural factors on innovation in a Thai SME," Management Research Review, Emerald Group Publishing Limited, vol. 34(12), pages 1264-1279, November.
    5. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    6. Brown, Sarah & Gray, Daniel & McHardy, Jolian & Taylor, Karl, 2015. "Employee trust and workplace performance," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 361-378.
    7. Masato Abe & Michael Troilo & Orgil Batsaikhan, 2015. "Financing small and medium enterprises in Asia and the Pacific," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 4(1), pages 2-32, April.
    8. Shen, Yan & Shen, Minggao & Xu, Zhong & Bai, Ying, 2009. "Bank Size and Small- and Medium-sized Enterprise (SME) Lending: Evidence from China," World Development, Elsevier, vol. 37(4), pages 800-811, April.
    9. Lau, Chung Ming & Bruton, Garry D., 2011. "Strategic orientations and strategies of high technology ventures in two transition economies," Journal of World Business, Elsevier, vol. 46(3), pages 371-380, July.
    10. Penrose, Edith, 2009. "The Theory of the Growth of the Firm," OUP Catalogue, Oxford University Press, edition 4, number 9780199573844.
    11. Cainelli, Giulio & Mancinelli, Susanna & Mazzanti, Massimiliano, 2007. "Social capital and innovation dynamics in district-based local systems," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(6), pages 932-948, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mateo Manuel Córcoles‐Muñoz & Gloria Parra‐Requena & Pedro M. García‐Villaverde & María José Ruiz‐Ortega, 2020. "Sense of belonging to an industrial district and knowledge acquisition: The role of strong and trusting interorganizational relations," Growth and Change, Wiley Blackwell, vol. 51(4), pages 1517-1541, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stienstra, Miranda, 2020. "The determinants and performance implications of alliance partner acquisition," Other publications TiSEM 7fdee0c2-d4d2-4f5b-95e3-2, Tilburg University, School of Economics and Management.
    2. Giulio Cainelli & Massimiliano Mazzanti & Sandro Montresor, 2012. "Environmental Innovations, Local Networks and Internationalization," Industry and Innovation, Taylor & Francis Journals, vol. 19(8), pages 697-734, November.
    3. Habibu Sani & Shazida Jan Mohd-Khan & Mohd Saifoul Zamzuri Noor, 2018. "Microfinance training and the number of loans received by SMEs. An empirical evidence from emerging economy," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(2), pages 326-341, April.
    4. Sophie Boutillier, 2019. "Small Entrepreneurship, Knowledge and Social Resources in a Heavy Industrial Territory. The Case of Eco-Innovations in Dunkirk, North of France," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(3), pages 997-1018, September.
    5. Kiss, Andreea N. & Danis, Wade M. & Cavusgil, S. Tamer, 2012. "International entrepreneurship research in emerging economies: A critical review and research agenda," Journal of Business Venturing, Elsevier, vol. 27(2), pages 266-290.
    6. ., 2013. "Reasons for business diversity and their economic importance," Chapters, in: Competition, Diversity and Economic Performance, chapter 5, pages 83-108, Edward Elgar Publishing.
    7. Enrique Acebo & José‐Ángel Miguel‐Dávila & Mariano Nieto, 2021. "External stakeholder engagement: Complementary and substitutive effects on firms' eco‐innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2671-2687, July.
    8. Istipliler, Baris & Bort, Suleika & Woywode, Michael, 2023. "Flowers of adversity: Institutional constraints and innovative SMEs in transition economies," Journal of Business Research, Elsevier, vol. 154(C).
    9. Cainelli, Giulio & D’Amato, Alessio & Mazzanti, Massimiliano, 2015. "Adoption of waste-reducing technology in manufacturing: Regional factors and policy issues," Resource and Energy Economics, Elsevier, vol. 39(C), pages 53-67.
    10. Abdul-Fatahi Abdulai & Lyndon Murphy & Brychan Thomas, 2019. "University Knowledge Transfer And Innovation Performance In Firms: The Ghanaian Experience," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(03), pages 1-33, April.
    11. D’Angelo, Alfredo & Majocchi, Antonio & Buck, Trevor, 2016. "External managers, family ownership and the scope of SME internationalization," Journal of World Business, Elsevier, vol. 51(4), pages 534-547.
    12. J. Francisco Rangel-Preciado & Francisco M. Parejo-Moruno & Esteban Cruz-Hidalgo & Francisco J. Castellano-Álvarez, 2021. "Rural Districts and Business Agglomerations in Low-Density Business Environments. The Case of Extremadura (Spain)," Land, MDPI, vol. 10(3), pages 1-18, March.
    13. repec:elg:eechap:14395_24 is not listed on IDEAS
    14. ., 2013. "Market niches, competition and economic performance: more clues from ecology?," Chapters, in: Competition, Diversity and Economic Performance, chapter 8, pages 160-182, Edward Elgar Publishing.
    15. Umer Ayub & Abdul Rashid Kausar & Mubashar Majeed Qadri, 2017. "Linking Human Capital and Organisational Innovative Capabilities of Financial Institutions: Evidence from a Developing Country of South Asia," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 16(04), pages 1-23, December.
    16. Giulio Cainelli & Massimiliano Mazzanti & Roberto Zoboli, 2011. "Enviromental Innovations, Complementarity and Local/Global Cooperation," Working Papers 201104, University of Ferrara, Department of Economics.
    17. Pezeshkan, Amir & Smith, Adam & Fainshmidt, Stav & Amini Sedeh, Amirmahmood, 2016. "National business systems and firm innovation: A study of developing economies," Journal of Business Research, Elsevier, vol. 69(11), pages 5413-5418.
    18. Madiha Noshad & Mariam Amjad & Muhammad Nouman Shafiq & Seemab Gillani, 2019. "Performance and Obstacles of SMEs: An Empirical Evidence from BRICS Countries," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 1(2), pages 113-132, December.
    19. ., 2013. "Diversity and the evolution of competitive economic systems," Chapters, in: Competition, Diversity and Economic Performance, chapter 6, pages 109-131, Edward Elgar Publishing.
    20. Colin Mason & Ross Brown, 2013. "Creating good public policy to support high-growth firms," Small Business Economics, Springer, vol. 40(2), pages 211-225, February.
    21. Rauch, Andreas & Rosenbusch, Nina & Unger, Jens & Frese, Michael, 2016. "The effectiveness of cohesive and diversified networks: A meta-analysis," Journal of Business Research, Elsevier, vol. 69(2), pages 554-568.

    More about this item

    Keywords

    Social capital; Number of employees; Technological innovation; SMEs performance; North-Western Nigeria;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:khe:scajes:v:5:y:2019:i:4:p:78-87. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adi Sava (email available below). General contact details of provider: https://edirc.repec.org/data/ffucdro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.