Social capital and entrepreneurial competencies: A study among women micro-entrepreneurs in Malaysia

Abstract

The participation of women entrepreneurs are rapidly increasing over last few decades and studies highlighted women entrepreneurship is one of the key contributors for economic development through speeds up development process, reduces poverty unemployment and inequalities, and improves the overall well-being of children. Development initiatives allover the world, therefore, focused on improving the socio-economic condition of low-income households through providing access to working capital and/or other resources to improve entrepreneurial performance. Development initiatives, however, commonly ignore the potential impact of social capital. Social capital is the most under-rated influential factor, which may have a strong influence on entrepreneurial competencies and enterprise performance. This study therefore aimed to examine the effect of social capital on entrepreneurial competencies among the women micro-entrepreneurs in Peninsular Malaysia. This study employs a cross-sectional approach and quantitative data are collected through structured interviews from registered women micro-entrepreneurs in Peninsular Malaysia. The sampling frame was based on the business directory of SME Corporation Malaysia’s registered members of National Association of Women Entrepreneurs. Based on the list of registered women entrepreneurs under the SME Corporation Malaysia, there are a total of 126,910 registered SMEs in Malaysia, owned by women entrepreneurs; among them, 111,571 are registered microenterprises. This research adopted the stratified random sampling method in order to identify 500 women entrepreneurs from the four regions. Among the selected 500 micro-entrepreneurs, a total of 421 micro-entrepreneurs were selected based on their recent status (active, own, and manage) and size. Among them, only 4 women micro-entrepreneurs refused the request for an interview; therefore, complete data were collected from 417 women micro-entrepreneurs. Findings of this study noted the r 2 values in the hierarchical entrepreneurial competency model noted that the degree of explained variance of this hierarchical construct is reflected in its components. The r 2 values in the hierarchical social capital model noted that the degree of explained variances of the hierarchical construct is reflected in its components. The path coefficient between social capital and entrepreneurial competencies is 0.495, indicates a positive effect of social capital on entrepreneurial competencies at the chosen 5% level of significance. Women entrepreneurs should be focusing on how to identify and reach key business players and spend time to network with other business by joining formal and informal networks. Development policies and programs in Malaysia should therefore focus on building social capital among micro-entrepreneurs to foster the national development process and reduces poverty, unemployment rate and inequalities.