Access to finance, social capital and the improvement of corporate performance: evidence from Southeast Asia

Purpose Although temporary work arrangements play a strategically important role in contemporary economic development, its influence on firm performance has remained elusive. In our work we measure firm performance from the systematic perspective, including both innovation and financial performance. Therefore, the purpose of this study is to test a model that specifies the influence of temporary work arrangements on the two indicators of firm performance, namely, innovation and sales. Design/methodology/approach This research is based on the Business Environment and Enterprise Performance Survey (BEEPS, 2009) created by the European Bank for Reconstruction and Development and the World Bank. As the relationship between temporary workers and firm performance could be contingent on institutional setting, we divide our sample in three country groups: European Union (EU), European countries outside the European Union (non-EU) and the Commonwealth of Independent States (CIS) countries. Furthermore, we analyze the actual question on all three groups of countries separately. Findings Findings provide support for the positive relationship between the percentage of temporary workers and innovation performance. On the other hand, the evidence reveals a negative link between the percentage of temporary workers and financial performance measured by sales. Taking into account country-specific effects, the results remain negative when examining the influence of the percentage of temporary workers on the financial performance measured by sales for all three country groups (EU, non-EU and CIS countries). However, the positive and significant effect of the share of temporary workers on innovation performance holds only for non-EU and CIS countries but is not observed for EU countries. Practical implications Given the importance of temporary work arrangements in terms of a systematic approach in contemporary business, policymakers should continue to work on improving their status to overcome potential negative outcomes related to the temporary workers’ engagement. In addition, managers of the firms should be aware that temporary workers could be a valuable source of innovation; however, they could hamper other aspects of firm performance. Therefore, they should be cautious when hiring temporary workers and find the “best balance” between permanent and temporary workers. Originality/value The obtained findings highlight the importance of performance context systematic approach in studying the impact of temporary workers and firm performance. Based on the obtained findings, we may suggest that knowledge and creativity accumulation through temporary workers’ engagement is beneficial for innovation performance improvement. Conversely, long-lasting labour engagement is necessary for financial performance improvement.

This paper examines empirically the effect of some commonly used indicators of social capital, such as the prevalence of trust on community members and the participation in voluntary secular and religious organizations, on the incidence of violent crimes. This is a cross-country study whose basic sample consists of 39 developed and developing countries and whose dependent variable is the national intentional homicide rate. The paper identifies and deals with three challenges in the empirical estimation of the effect of social capital on the incidence of violent crimes. The omittedvariable problem is dealt with by including income inequality and economic growth as additional determinants of a country’s violent crime rate. The joint endogeneity (or reverse-causation) problem is accounted for by using instrumental variables for social capital in the crime regression. The specificity problem, that is the potentially opposite effects of group-specific and society-wide social capital, is noted and addressed only indirectly by emphasizing the results applied to the social capital indicators that have application for society as a whole. The main result of the paper is that only the component of social capital measured by trust on community members has the effect of reducing the incidence of violent crimes. The results regarding measures of other indicators of social capital are rather unclear. This may be due to a combination of limited samples, inability to fully control for reverse causation, and most likely, the opposite effects that society-wide and group-specific social capital may have on violent crime. ∗ Lederman and Menendez are economists with the Office of the Chief Economist for Latin America and the Caribbean of the World Bank. Loayza is a senior economist with the research department of the Central Bank of Chile, and he is currently on leave from the Development Economics Research Group of the World Bank. The opinions expressed herein should not be attributed to the World Bank. The authors are grateful to Ed Glaeser, Jeff Grogger, Gale Johnson, Sanjay Marwah, Steve Messner, Nicholas Sambanis, and an anonymous referee for invaluable comments and suggestions. The authors are responsible for any remaining errors.

Research on firm internationalisation has tended to focus on Large Enterprises(LEs), with relatively less focus on Small Medium Enterprises (SMEs), despite the importance of SMEs in generating national employment and economic development. In many countries the government has acknowledged SMEs as a key source of domestic income growth and employment creation, most particularly from export activities. Studies on internationalisation of SMEs, however, have been predominantly focused on developed countries. This study therefore is focused on the internationalisation of SMEs from Indonesia, which represents developing countries. Most studies of exporting SMEs focus on macroeconomic factors such as regulation, infrastructure and programs which assist SME development. On the other hand, management literature has recognised the important roles of senior managers in terms of their management know‐how and international business skills as human capital which can influence the export activity of the firm. At the same time, social capital is also recognised a further resource needed for SME internationalisation. Therefore this research will address this gap in order to examine the role of entrepreneur’s human and social capital in internationalisation of the firm. Further to this, findings on the relationship between firm internationalisation and firm performance are mixed. More specifically, the effect of internationalisation of SMEs on business performance has not been seriously investigated. This study therefore seeks to fill this gap by examining the unique effect of different dimensions of internationalisation on business performance. Overall, this study has three purposes: the first is to measure company resources (Human and Social Capital) influencing Indonesia’s manufacturing exporting SMEs in their internationalisation process; the second is to examine the effect of human and social capital in relation to three dimensions of internationalisation (international performance, number of markets and time to internationalise); and the third is to assess the effect of the aforementioned internationalisation dimensions on firm financial performance. This study used a mixed method combining quantitative and qualitative approaches. The quantitative data was drawn from 241 SMEs’ managers and/or owners who have exporting activities from a total of approximately 3 million SMEs based on the Indonesian government database. The qualitative data was collected through interviews with ten SMEs owner‐managers who were participating in the survey. Using Structural Equation Modelling (SEM) technique, the findings suggest that Management Know‐How have no positive relationship with any dimension of internationalisation, but, interestingly, it has a negative relationship with time for internationalisation; suggesting that it delays the internationalisation of the firms. The findings also show that both International Business Skills and Social Capital skills have a positive relationship with international performance and number of exporting markets, but not with time for internationalisation. With regard to the effect of internationalisation on business performance, the findings show that international performance has no effect on business performance, but the number of export market has a positive relationship with business performance. On the other hand, the time for internalisation has a negative effect on business performance, meaning that the later the SMEs internationalise, the better their performance. Qualitative findings indicate that good networks with competitors, suppliers and government will help a firm to serve the international market successfully. From theoretical perspectives, the findings support the Resource‐Based View theory as international business skills have positive relationships with two dimensions of internationalisation. The findings of this study also support the traditional view of incremental internationalisation advanced by Stage Theory. Consequently, the findings imply that International New Venture Theory, which supports born‐global or leap‐frog approach in internationalising SMEs, is not appropriate for Indonesian context. Finally, this study also supports the Network Perspective which suggests that the relationships built by firms with other businesses, community leaders, and government have significant effect on internationalisation of SMEs. Overall, this study demonstrates the unique effect of different organisational capitals (i.e. human and social) as key resources for facilitating internationalisation.

Social capital and innovation performance of digital firms: Serial mediation effect of cross-border knowledge search and absorptive capacity

Literature on Intellectual Capital provides interesting arguments about the key role of social and human capital, not only separately but also jointly, for innovation activities. Thus, given the acknowledged importance of these variables, this article studies (1) the direct relationship between social and human capital and innovative performance, (2) the links between these two components of intellectual capital, as well as the possible mediating role of human capital, (3) the effect of particular human resource management (HRM) practices (selection procedures, development programmes, empowerment and use of incentives on compensation) on social and human capital, and (4) the influence of innovative performance on firm performance. In our study, we define a population of firms in the most innovative Spanish sectors for an empirical test of this model, focusing on their R&D departments. Using data taken from 85 firms and applying Structural Equation Models, we have tested the hypotheses and obtained interesting results. It is the uniqueness of human capital, and not its value, which has a direct and positive effect on firm innovativeness. Such uniqueness, in turn, is enhanced through social capital and HRM practices such as empowerment and employee selection based on learning potential and interpersonal abilities. Social capital does not have, per se, a direct influence on innovation, but it indirectly does through human capital. Social capital, in turn, can be enhanced by the selection of individuals with learning potential and interpersonal skills, as well as by their involvement in decision-making processes. Finally, innovation improves firm performance.

The objective of this article is to start unravelling that question by analyzing selected institutional determinants of the impact and performance of community-based water services. Using quantitative and qualitative data from 1088 rural households and 50 water committees this study investigates how service rules and practices social capital and governmental and nongovernmental organization institutions affect the impact and performance of services supported by three projects in Sri Lanka and India that are financed by the World Bank. In this article we focus on measuring and econometrically analyzing selected aspects of project design and implementation such as the importance of community participation in service design and decision making. This article is also one of the first to measure and econometrically analyze the effect of social capital on the impact of community-based water services. (excerpt)

In order to clarify the relationship between social capital and firm performance, this research extends previous research using business network data collected from emerging markets in electronics companies to explore three questions: (1) Is the relationship between social capital and firm performance a non-linear inverted U-shaped curve? (2) Is the relationship between social capital and firm performance affected by technical uncertainty? (3) How does technical uncertainty affect the optimal level of social capital? Our research suggests that the relationship between social capital and firm performance is an inverted U-shaped curve. When social capital begins to increase, firm performance increases until it reaches equilibrium, after which it begins to decrease with the increase of social capital. This shows that too much or too little social capital has a negative impact on firm performance, while moderate social capital can lead to the greatest firm performance in a company. Also, the higher the technical uncertainty, the greater positive effect social capital has on firm performance. Furthermore, higher levels of technical uncertainty push the equilibrium point for social capital higher. Therefore, the higher the levels of technical uncertainty companies face, the more companies may rely on the building of corporate networks to gain necessary resources and promote business development.

Purpose – This study aims to explore the extent to which social capital plays a role in firm development, internationalization and growth, in the context of an emerging market, Brazil. The study aims to provide a new context and perspective on the role social capital plays in fostering growth and internationalization among small and medium enterprises (SMEs) in an emerging market. Design/methodology/approach – This is an exploratory study. First, empirical data are drawn from a commodity industry, the Brazilian Stone industry, which is a competitive, well-established sector in the country. Using a previously validated questionnaire from the World Bank, the extent of social capital possessed and used by the firms in this industry is correlated to their growth and performance. Based on the exploratory results, a set of research propositions are developed that point the way to questions that are important and interesting to further understand the role of social capital in this context. Findings – The results point to fairly low levels of social capital among Brazilian SMEs in this sector and relatively low levels of awareness of the potential opportunities to exploit social capital to further development and internationalization. Research limitations/implications – Social capital matters for firm growth and performance, but the extent of development of social capital in this context is fairly low. The limitations include the sample size and the homogeneity of the sample, which restricts generalizability. Practical implications – Building and exploiting social capital is a void that currently exists in the commodity sector in Brazil. Developing this can lead to more positive firm performance and growth, especially as the institutional context in Brazil continues to develop. Originality/value – The paper offers a unique context, as well as a new perspective on the role of firm social capital, by using an emerging market and a commodity industry that has been rarely studied in the literature.

Operational efficiency, a dominant concern for businesses, is always an issue for the researchers to find the solutions for helping the businesses enhance their corporate performance. In previous studies on the performance of enterprises in general and small and medium-sized enterprises in particular, most of the studies focused on financial factors, but did not pay much attention to nonfinancial factors. Operational efficiency depends on financial and non-financial factors, of which, non-financial factors are diverse (human capital, social capital, psychological capital, non-financial risk, management efficiency, etc.). theory, applied science, etc). Social capital is a new area of research in Vietnam, which is closely related to the economic field. In Vietnam, interdisciplinary theoretical applied research is a new research trend (economic theory combined with social theory), which this study follows. The study applies the social capital theory ``The strength of weak ties'' of Granovetter, theory ``The network Structure: of Burt and ``A Network theory of social capital'' of Lin to examine the influence of social capital on firm performance. The research model comprises 5 factions of independent variables representing social capital (Relational (REH), Cognitive (CSC), Social Interaction Ties (SIT), Trust (TRU) and Structural (SSC) and a group of dependent variables (Firn Operational Performance). Structural Equation Modeling was used to analyze data collected from a survey of 378 SME managers in Ho Chi Minh City based on a convenient method. The analysis results demonstrate that all aspects of social capital have positive effects on business operational performance, of which Structural Social Capital (SSC) and trust (TRU) are the two most influential groups. The research results help business administrators better understand social capital's importance, thereby improving business performance through maintaining and developing managers' social capital.

In general, social capital is defined as new intellectual capital created by combination and exchange among firms in structural, relational, and cognitive dimensions. The structural dimension means characteristics and topology of relationships among firms, the relational dimension consists of the quality of network components like trust, norms, and reciprocal obligations, and the cognitive dimension is the sharing of vision, value, and common fate among firms. Understanding social capital as an emerging technological component of Supply Chain Networks (SCN) will be increasingly important in order to enable continued SCN improvement. With the social capital concept, we investigate how these dimensions of supply chain social capital have an effect on firm performance and how the relation between firms moderates the effect using Structural Equation Model (SEM). The result demonstrates that the relational dimension indirectly affects innovation and executive-oriented performance, the structural dimension directly affects both innovation and executive oriented performance, and cognition also affects only innovation-oriented performance. Supply chain social capital provides an opportunity and challenge to supply chain managers in order to improve firm performance. We provide several implications for supply chain managers. First, we relate three dimensions of social capital to three firm performances and highlight the importance of raising and utilizing social capital to improve supply chain performance. In order to improve innovation-oriented performance, such as the business process, new technology adoption, and capability, supply chain managers should pay close attention to the cognitive dimension of social capital. Managers should build up cognitive capital based on relational capital among supply chain partners. It may be made by common events for sharing value and vision together and also by firms’ interacting with supply chain information systems. Managers also should develop different supply chain social capital according to the supply chain strategy and characteristics with regards to the products within the supply chain network. If a supply chain deals with functional products and takes an efficient supply chain strategy (Fisher, 1997), managers should attempt to make structural capital to improve executive performance. Second, managers need to separate and manage supply chain performance metrics because the performances are different depending on social capital and the relation. In other words, managers should separate and control performance metrics into innovation-oriented and executive-oriented performance measures through a strong and weak supply chain network in order to improve management performance.. In general, social capital is defined as new intellectual capital created by combination and exchange among firms in structural, relational, and cognitive dimensions. The structural dimension means characteristics and topology of relationships among firms, the relational dimension consists of the quality of network components like trust, norms, and reciprocal obligations, and the cognitive dimension is the sharing of vision, value, and common fate among firms. Understanding social capital as an emerging technological component of Supply Chain Networks (SCN) will be increasingly important in order to enable continued SCN improvement. With the social capital concept, we investigate how these dimensions of supply chain social capital have an effect on firm performance and how the relation between firms moderates the effect using Structural Equation Model (SEM). The result demonstrates that the relational dimension indirectly affects innovation and executive-oriented performance, the structural dimension directly affects both innovation and executive oriented performance, and cognition also affects only innovation-oriented performance.

PurposeThis paper examines the nexus between supply chain social capital (relational social capital and structural social capital), supply chain responsiveness (operations system responsiveness and supplier network responsiveness) and firm performance. Additionally, the study examines the mediating role of supply chain responsiveness on the relationship between supply chain social capital and firm performance.Design/methodology/approachThe authors test their hypotheses on a sample of 120 firms operating in Ghana. The measurement model and hypothesized paths were assessed using partial least squares structural equation modelling.FindingsThe findings revealed that structural social capital had a significant direct effect on firm performance, but relational social capital did not. It was also revealed that both relational and structural social capital have significant effects on operations system responsiveness and supplier network responsiveness. Additionally, operations system responsiveness fully mediated the effect of relational social capital on firm performance and partially mediated the effect of structural social capital on firm performance. Supplier network responsiveness, on the other hand, partially mediated the effect of both relational and structural social capital on firm performance.Originality/valueThis study contributes to the limited literature on supply chain social capital by unearthing the mechanisms through which supply chain social capital enhances firm performance. Specifically, the study demonstrates the intervening role of operations system responsiveness and supplier network responsiveness in the supply chain social capital–firm performance link.

زنان سرپرست خانوار فقیر یکی از گروه‏های آسیب‏پذیر جامعه هستند. این زنان علاوه بر نقش‏های متداول برای زنان در خانواده، متولی نقش‏های مربوط به سرپرستی خانوار نیز هستند. از این رو، تلاش برای توان‌مندسازی آن‌ها از اولویت ویژه‏ای برخوردار است. در این بین، برخورداری از آمادگی ذهنی و روانی پیش‌شرطی اساسی برای شکوفایی قابلیت‏های فردی در دیگر عرصه‏های زندگی است. بر این اساس، تحقیق حاضر با هدف بررسی رابطۀ سرمایۀ اجتماعی و توان‌مندی روانی در زنان سرپرست خانوار در قالب پژوهشی پیمایشی متشکل از 324 زن شاغل در مراکز کارآفرینی و مهارت‏آموزی کوثر شهرداری تهران، صورت پذیرفته‏است. برای اخذ نمونه، ابتدا مراکزی به صورت تصادفی از لیست مراکز موجود انتخاب و سپس کارکنان هر مرکز تمام‌شماری شده‌اند. این روند تا تحقق حجم نمونۀ تعیین‌شده ادامه یافته است. ابزار گردآوری اطلاعات نیز پرسش‏نامۀ محقق‌ساخته بوده است. داده‏های حاصل با روش‏های آماری تحلیل هم‌بستگی و تحلیل هم‌بستگی کانونی تجزیه‌وتحلیل شده‏اند. یافته‏های تحقیق در مجموع مؤید هم‌بستگی متوسط بین مؤلفه‏های مختلف سرمایۀ اجتماعی و توان‌مندی روانی بوده‏ است. در عین حال، هم‌بستگی‏ بین «توانایی تصمیم‏گیری» و «اعتماد به نفس» با مؤلفه‏های مختلف سرمایۀ اجتماعی قوی‏تر از سایر مؤلفه‏های توان‌مندی روانی بوده‏ است. در بین متغیرهای زمینه‏ای نیز در اغلب موارد سن اثر منفی و مدت سرپرستی، درآمد و تحصیلات دارای اثر مثبت بر مؤلفه‏های توان‌مندی روانی بوده‏اند. همچنین، تحلیل هم‌بستگی کانونی، نشان‏دهندۀ‏ نقش تبیین‏کنندگی سرمایۀ اجتماعی بر توان‌مندی روانی است.

The purpose of this study is to present a model that illustrates the general influence of technological capability, social capital, entrepreneurial orientation on firm performance through absorptive capacity in the food and beverage packaging industry in Indonesia. The model proposed in this study was tested with a structural equation model. This study processed data from 168 respondents of manager-level employees to the company owner level in the food and beverage packaging industry. This study found that technological capability, social capital and absorptive capacity have a positive and significant effect on firm performance. Meanwhile, entrepreneurial orientation has a positive but not significant effect on firm performance. This study found that technological capability, social capital and absorptive capacity have a positive and significant effect on firm performance. Meanwhile, entrepreneurial orientation has a positive but not significant effect on firm performance. Absorptive capacity mediates the relationship between technological capability and social capital to firm performance and absorptive capacity fully mediates the relationship between entrepreneurial orientation and firm performance. This research model only limits the factors that affect company performance to four main variables, namely technological capability, social capital, entrepreneurial orientation and absorptive capacity. Further research is suggested to use samples in other industries and add other variables such as uncertainty or uncertainty of environmental conditions as moderation variables. The practical implications of this research are that companies need to do three things if they want to get the benefits of entrepreneurial orientation and absorptive capacity to improve firm performance. Further research is suggested to use samples in other industries and add other variables such as uncertainty or uncertainty of environmental conditions as moderation variables. The practical implications of this research are that companies need to do three things if they want to get the benefits of entrepreneurial orientation and absorptive capacity to improve firm performance. The new knowledge gained is very helpful for companies to determine strategies, levels of innovation, proactiveness and high-risk decisions, especially when there is uncertainty in the industrial environment. This study presents the mediating function of absorptive capability tested simultaneously with the variables technological capability, social capital, entrepreneurial orientation is something new from this study compared to previous studies. The findings in this study also provide an additional contradictory list of previous studies on the relationship between entrepreneurial orientation and firm performance.

Social capital, understood as norms of reciprocity and associational life, is supposed to provide a bottom‐up approach to poverty alleviation world‐wide. The World Bank says that social capital is a necessary condition for long‐term development and that social capital is the capital of the poor. This paper will argue that much of the literature is too sanguine of the benefits of social capital for the poor. It is, of course, important to look at the extent to which social capital can help the poor. But how the conditions of the poor people can also affect their social capital is equally important to examine, and this has often been neglected by many scholars who have been busy to prove that social capital is a new paradigm of development. Based on qualitative interviews in two rural areas in Orissa, eastern India, this paper seeks to examine whether and to what extent poor people of the daily wage labour class benefit from their social capital. It then goes on to unpack the mechanisms in which the economic‐political conditions under which poor people live and the spatiality of these conditions affect the production of social capital. By seeking to unpack the dialectical relation between social capital and poverty, the paper aims at problematizing the overly optimistic claims about social capital. It shows that it is untenable to posit social capital as an independent variable and poverty as a dependent variable because the economic‐political conditions of poor people have an enormous constraining effect on social capital itself and its supposed material benefits for the poor.

This virtual platform study enhances the building of stronger social communities. It researches the influence of end-user motives on social relationship dimensions by highlighting the mediating pathways of social connectivities. Developers and businesses can enlist the findings to customise their virtual end-user-targeted solutions and then deliver value-added virtual services and products. The relationship between end-user motives and the formation of social capital remains critical in understanding casual influences; however, there has been no previous research looking at this relationship by considering social connectivities. Previous research on end-user motives and social capital within one type of online gaming environment indicated some driving factors behind the development and formation of social capital in virtual worlds. This study focuses on active end-users participating in one of three substantive virtual world platforms to examine whether end-user motives influence their social capital dimensions. Three basic theories—gratification, social relationship and social capital—underpin this study's social capital motives model. In this model, end-user motive antecedents— achievement, control, escapism and friendship—are linked to social connectivities through bridging and bonding, which, in turn, are linked to the social capital's cognitive, relational and structural dimensions. An online global survey in English provided 274 valid and usable cases from three different virtual worlds. A quantitative approach is used to test the proposed research framework model. The resulting empirically tested social capital motives model was bootstrap-validated using AMOS 22. The model delivered a high-quality fit across all relevant fit indices. The social capital motives model verified 12 hypothesised paths as significant and theoretically justified. Here, achievement and escapism show a significant positive effect on bridging social connectivities, whereas control, escapism and friendship show a significant positive effect on bonding social connectivities. Next, bridging social connectivities shows a strong positive effect on bonding social connectivities. Bridging social connectivities also offers a positive influence on cognitive social capital. Bonding social connectivities positively affects cognitive, relational and structural social capital dimensions. Finally, both the cognitive and structural dimensions are found to have a significant effect on the resulting relational social capital dimension. The social capital motives model contributes to research within international business (particularly virtual world businesses and social media) and information technology platforms. Theoretically, this study's two-stage Structural Equation Modelling (SEM) path model integrates three theories and redefines bonding and bridging as social connectivities. This study shows end-user motives can indirectly influence social capital dimensions through social connectivities. Thus, researchers investigating the formulation of social capital in virtual worlds can apply the social capital motives model as a starting point when developing their more advance social capital research models. Businesses can engage the social capital motives model to further motivate their end-users to generate greater social capital, which, in turn, will strengthen interactions among existing end-users and, consequently, attract new end-users.