Entrepreneurial Social Capital and Performance of Micro, Small, and Medium Enterprises

Abstract

This study aimed to establish how entrepreneurial social capital influenced the Performance of MSMEs in Mombasa so as to gain an understanding of which strategies need to be formulated so as to stimulate the performance of the MSMEs. To achieve this objective, specific objectives included assessing the extent to which structural social capital, relational social capital, and, thirdly, cognitive and social capital influence the performance of MSMEs in Mombasa County. The research was guided by theories, including Social, signaling, and Resource-based view theories. The research adopted a descriptive design, with the population targeted being drawn from MSMEs operating within Mombasa County, from which a representative sample of 353 SMEs was selected as respondents. The respondents were selected using random sampling. Data that the researcher collected was collected with the aid of structured questionnaires, and finally, data was assessed, and inferences were made through descriptive statistics that guided the researcher to draw conclusions. The researcher found that dimensions of social capital, structural, relational, and cognitive, do significantly and positively influence the performance of MSMEs in Mombasa County. The study concluded that a positive correlation exists, implying that business management has to harness social capital correctly to improve business performance and poster upward growth. The study advances the empirical findings and theoretical foundations of social capital. In further research in this field, it would be useful to compare the influence of social capital on competitiveness indicators confirmed in firms’ financial reports by using a sample of enterprises with more transparent financial information.