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


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


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

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    References listed on IDEAS

    1. Murphy, James T., 2002. "Networks, Trust, and Innovation in Tanzania's Manufacturing Sector," World Development, Elsevier, vol. 30(4), pages 591-619, April.
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    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.

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    More about this item


    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


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