Effects of knowledge transformation and social capital on business performance

Abstract

PurposeThis article delves into the antecedents of business performance. The main aim of this study is to analyze the effect of knowledge transformation on business performance in firms in the tourism industry and how cognitive and structural social capital heterogeneously moderate this relationship.Design/methodology/approachThe empirical study was conducted on a sample of 300 firms from the tourism industry in Arequipa-Perú. The analysis was performed by means of partial least squares structural equation modeling, using the Smart PLS software.FindingsOur findings show that knowledge transformation is key factor for increasing business performance. The results also highlight the significance of interorganizational relationships in this effect and the importance of analyzing each dimension of social capital separately. Thus, it is observed that cognitive social capital enhances the relationship between knowledge transformation and business performance, while (Sari and Indriani, 2023) structural social capital hinders it.Practical implicationsThe findings assist practitioners in developing a shared culture, values and goals with their contacts to improve business performance. Furthermore, firms should establish bridging ties with external agents to avoid be stuck in excessively dense networks. Relationships with institutions can act as a bridging agent.Originality/valueThis paper analyses the unresolved question of how knowledge transformation affects the business performance of companies in the tourism sector as well as how different dimensions of social capital influence in this relationship. Addressing these two critical, but as yet unresolved questions, this study draws on absorptive capacity and social capital theories as an overarching framework to present a conceptual model that integrates both theories in order to analyze the effect of knowledge transformation on business performance in tourism firms and the role of structural and cognitive capital on this relationship.