Can social capital explain business performance in Denmark?

Abstract

Motivated by the limited evidence on the positive link between social capital and firm performance, this paper explores this potential driver of firm performance at the firm rather than macro-level by employing a novel approach: we capture social capital at a community level rather than focus on the narrow aspect of entrepreneurs' own social network. Using Principal Component Analysis to aggregate various trust, norm, and network related variables to construct social capital variables with more than 150,000 firm-level observations for firm performance variables, this paper identifies an overall positive and significant effect of social capital on firm performance in Denmark. These effects are robust to firm-level social capital measures, different sampling years and alternative measures of firm performance (return on asset, current ratio, solvency ratio and profit margin) and network (Putnam and Olson groups).

Ownership, capital structure and operating loss of acquiring firms

“…Leverage: we use the ratio of book value of debt to book value of total assets as the proxy for capital structure (Margaritis & Psillaki, 2010; Harrison et al. , 2014; Wang & Steiner, 2020; Wang, Madsen, & Steiner, 2017).…”

The Role of Value Innovation Capabilities in the Influence of Market Orientation and Social Capital to Improving the Performance of Central Kalimantan Bank in Indonesia

“…Marketing performance measurement can be seen from product improvement and sales increase; in innovation activities, the value of product superiority and product function is a superior value for a strong core business. Meanwhile, marketing performance is the result achieved by business units from activities in the field of effective and efficient marketing, through managing resources by implementing business strategies [5,17,27,38,39,46,51].…”

“…Value innovation is one of the dynamics of innovation that is very sensitive to core business values, which are based on the values of product excellence. To encourage value innovation, external factors are needed, such as market orientation based on needs and social capital based on network values, network relationships and different superior cultures that have the potential to improve bank performance [9,16,25,38,39,46,51]. The results of social capital research can improve the performance of the Kal-Teng bank because the factors of social value, network value and network relationships can encourage value innovation capability to create a business strategy that is superior to the core value of the bank's product business.…”

Firm‐level productivity growth returns of social capital: Evidence from Western Europe

“…However, many of the existing studies present limitations that curb the potential for generalization of their findings. Most works adopt a single‐country perspective (Bürker et al, 2013; Bürker & Minerva, 2014; Cooke, 2007; Cooke et al, 2005; Sabatini, 2008; Wang & Steiner, 2020). Di Guilmi et al (2008) and Bloom et al (2012) are the exceptions, as they examine cross‐country differences in social capital at the national level.…”