Social Capital, Market Competition, and Productivity Growth in Family Businesses in Ghana

Abstract

This study examines the effects of social capital, developed as a result of the social networking relationship with top managers of other firms and community leaders, on productivity growth in family businesses in Ghana. It further investigates how market competition moderates the relationship between social capital and productivity growth. An analysis of the data from 54 family businesses over two time periods indicates that (1) social capital from the social networking relationships with top managers of other firms helps the productivity growth of family businesses, (2) social capital from the social networking relationships with community leaders is beneficial to family businesses by facilitating the growth of productivity, and (3) the benefit of social capital from both top managers from other businesses and community leaders to family businesses is moderated by market competition. The relationship between social capital and productivity growth is tempered by the intensity of competition in the market environment.