The Effect of Cognitive and Relational Social Capital on Structural Social Capital and Micro-Enterprise Performance

Abdullah Al Mamun,Rajennd A/L Muniady,Mohd. Rosli Mohamad,P. Yukthamarani Permarupan,Noor Raihani Binti Zainol

doi:10.1177/2158244015611187

Abdullah Al Mamun, Rajennd A/L Muniady + Show 3 more

Open Access

https://doi.org/10.1177/2158244015611187

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Journal: SAGE Open	Publication Date: Oct 1, 2015
Citations: 47	License type: cc-by

Affiliation: Universiti Malaysia Kelantan

Abstract

Social capital and its dimensions are highly interrelated, and the outcome of social capital provides entrepreneurs with resources and knowledge that are not available in the first place. The objective of this study is to examine the effect of relational and cognitive social capital on structural social capital and the effect of structural social capital on the performance of micro-enterprises owned and managed by women in Peninsular Malaysia. This study uses a cross-sectional approach, and quantitative data are collected through structured interviews. It was found that cognitive social capital has a significant positive effect on structural social capital, and structural social capital has a significant positive effect on micro-enterprise performance. It was found that relational social capital has a positive but insignificant effect on structural social capital. Therefore, women entrepreneurs should emphasize on making the communication process easier and on ensuring that their business values, norms, interpretation, and meaning are shared and communicated to relevant parties to improve network ties and to build a dense network, which is essential in providing access to resources and knowledge. This, in return, is expected to improve the micro-enterprise performance in Malaysia.

Highlights

The term social capital indicates the resources that are available from and through personal and business networks
Social capital and its three dimensions are inseparable in the world of entrepreneurship
Prior studies focused on individual effects of social capital dimensions or as a whole on firm performance and neglected to study the interrelations among the dimensions

Summary

Introduction

The term social capital indicates the resources that are available from and through personal and business networks. These personal and business networks generate resources, such as business opportunities, information, financial capital, ideas, leads, emotional support, trust, cooperation, and even goodwill. An influential French sociologist, defined social capital as the sum of resources, actual or virtual, that are available to individuals or a group derived from strong network relationships built by mutual acquaintance and recognition (Gauntlett, 2011). The World Bank defines social capital as “the groups, networks, norms, and trust that people have available to them for productive purposes” The World Bank defines social capital as “the groups, networks, norms, and trust that people have available to them for productive purposes” (Grootaert, Narayan, Jones, & Woolcock, 2003; p. 3)

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