The impact of social capital on business development in Ghana: Experiences of local-level businesses in the Kumasi Metropolitan Area

Abstract

Social capital may play a critical role in assisting individuals in leveraging their social networks and group relationships to attain their desired outcomes. We evaluated the influence of social capital on the success of startup enterprises in the Kumasi Metropolitan Area (KMA), utilizing 13 Ghana Enterprise Agency (GEA) clients as participants in this study. The study used interview data and institutional documents, which were conducted using a qualitative technique. Thematic analysis was used in conjunction with content analysis, and the study revealed three distinct forms of social capital—structural, relational, and cognitive that contributed significantly to the business growth of the agency's clients who used its services and supported their businesses through social networks. The study also found that “groups and networks,” “shared norms, beliefs, and duties,” “trust,” and “connectivity” are important elements influencing the KMA's business sustainability. According to the study, the structural, relational, and cognitive elements of social capital are vital in forming group cohesiveness and social relationships, which are critical in supporting the growth of new enterprises in Ghana, particularly in the KMA. The study recommends that efforts to build the resilience of social capital in start-up businesses and create an enabling social network system would support local-level business sustainability. The conclusion drawn from the findings implies that social capital has the potential to foster group cohesion and beneficial social ties to enhance business growth.