Social capital and firm performance nexus: The role of new product development capability and environmental dynamism in an emerging economy

ABSTRACT

This paper seeks to examine the argument that the social capital and market performance link is more pronounced when it is channelled through the new product development capability of the firm. The study further argues that the indirect effect of social capital on market performance, via new product development capability, is conditional upon levels of environmental dynamism. We tested the hypotheses using data from 313 managers and owners of small and medium-sized enterprises (SMEs) in Ghana. We analyzed the data using the conditional PROCESS analysis software, in SPSS 23.0, and structural equation modelling (SEM). We found that new product development capability partially mediates the relationship between social capital and market performance. The study further discovered that the indirect relationship between social capital and market performance is significantly enhanced at higher levels of environmental dynamism. This study's finding will help managers of SMEs understand the need to invest in building their social capital resource and the complementary new product development skills needed to improve firm performance.

KEYWORDS:

• social capital
• emerging economy
• small and medium-sized enterprises (smes)
• environmental dynamism
• market performance
• new product development capability

Disclosure Statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Patrick Awusak Akanpaaba

Patrick Awusak Akanpaaba is a young scholar who graduated with a PhD in Business and Management from the Kwame Nkrumah University of Science and Technology (KNUST). His research interests are in entrepreneurship, strategy, and human capital management. He is a member of the African Academy of Management (AFAM) and a senior certified member of the Society for Human Resource Management, USA. Patrick currently leads the Human Resource Localisation Department of Ghana's Upstream Petroleum sector regulator, the Petroleum Commission, Ghana.

Ahmed Agyapong

Ahmed Agyapong is an Associate Professor of Strategic Management at the Kwame Nkrumah University of Science and Technology (KNUST). He has published extensively in reputable journals, including the Africa Journal of Management and International Journal of Emerging Markets, and serves as a reviewer for both journals. His research interest focuses on entrepreneurship and family businesses, strategic management, and sustainability. He is a member of the African Academy of Management (AFAM), the Academy of International Business, and the Academy of Management (AOM). Ahmed is currently the Head of the Department of Marketing and Corporate Strategy, KNUST.

Henry Kofi Mensah

Henry Kofi Mensah is an Associate Professor of Management with over 10 years of experience in teaching and research in Organizational Behaviour, Business Sustainability, Responsible Management and Small Business Strategy. He is committed to engaging in high-quality scholarly research with an excellent international outlook. He has worked in various consulting capacities with both international and local agencies. He is a visiting trainer with International Trade Centre engaged in teaching modules in governance and human capital issues sustainability. He has published in various reputable journals and has presented research papers at various local and international conferences including the African Academy of Management (AFAM) conference where he won the 2018 Emerald best paper in Strategy and International Management. Some of his scientific works are published in Human Relations, Career Development International, Africa Journal of Management, and Management Decision. He is an editorial team member of the Journal of Global Responsibility. He is a member of the African Academy of Management and Academy of International Business (AIB) – African Chapter.

Samuel Yaw Akomea

Samuel Yaw Akomea is a senior lecturer at the Kwame Nkrumah University of Science and Technology (KNUST). His research interests are in entrepreneurship, strategy and international business. He has published in an international peer-reviewed journal. Sam is currently the Head of the Centre for Business Development and Kumasi Business Incubator, KNUST.