The impact of social capital on competitive advantage

Abstract

Purpose – The purpose of this paper is to empirically examine the influence of social capital on competitive advantage through collective learning and absorptive capacity. Design/methodology/approach – The study carries out analyses based on structural equation modeling to measure the main constructs and test the hypothesized relationships among the variables. The primary statistical technique for assessing survey data collected from 358 Taiwan tenants is partial least squares analysis. Findings – Collective learning and absorptive capacity fully mediate the relationship between social capital and competitive advantage. Moreover, social capital has a significant influence on both collective learning and absorptive capacity. Practical implications – Tenant firms in industrial parks must develop effective management tactics for the nurturing of inter-firm relations to enhance collective learning and their absorptive capacity to acquire and exploit key strategic resources such as tacit and explicit knowledge. For specialized firms, close social interactions in specific contexts, mediated by collective learning and absorptive capacity to make up for their resource constraints, can heighten their competitive advantage. Originality/value – By demonstrating the impact of social capital on competitive advantage in the specific context of industrial parks, whose artificial environment encourages and promotes close social interactions among tenants, this paper overcomes previous and contradictory findings regarding the relationship between social capital and competitive advantage. A key contingent factor is the mediating role of collective learning and absorptive capacity.

The Effect of Social Capital and Absorptive Capacity through Knowledge Management on Finance Company Performance in Indonesia

“…The findings in this study are in line with previous research results from Chuang et al (2016), Aribi & Dupouet (2015) and Hughes et al (2014).The findings are in line with previous research because finance company actively interacts with partners in carrying out their daily business activities. This is consistent with Chuang et al (2016) suggesting that companies should strengthen relationships within the business network to facilitate knowledge exchange.The direct effect of Social Capital on Absorptive Capacity is 75.69%. This figure is derived from the calculation of the coefficient value of path (standard solution) Social Capital to Absorptive Capacity of 0.87 squared and then multiplied by 100 percent to obtain 0.87 × 0.87 × 100% = 75.69%.…”

“…However, social capital has no direct influence on organizational performance. The results of this study are reinforced by research conducted by Chuang et al (2016) which states that social capital has no direct effect on performance in terms of competitive advantage.The results of research indicating that social capital has no direct effect on organizational performance is different from the results of previous research. Zhang & Fung (2006) conducted research on private companies from various industries in China.…”

“…The study was conducted on 461 manufacturing and service companies in Greece. One of the research results shows that absorptive capacity has an effect on company performance from innovation side and also indirectly affect to financial performance.The results of Hughes et al (2014) and Kostopoulos et al (2011) is also strengthened by the results of Chuang et al (2016) research. The research was conducted by using social capital variable, absorptive capacity, collective learning and company performance in terms of competitive advantage.…”

“…The results of this study strengthen the results of research Hughes et al (2014) which shows that social capital through network intensity dimension has a positive effect on company absorptive capacity. Chuang et al (2016) conducted a study of 358 manufacturing companies located in industrial estates in Taiwan. Research conducted using social capital variables, absorptive capacity, collective learning and company performance in terms of competitive advantage.…”

“…In this case the absorptive capacity is related to the exploration of external knowledge (Lichtenthaler&Lichtenthaler, 2009). Firms with better absorptive capacity have the potential to have access to the knowledge of other companies that will enhance the company's competitive advantage (Chuang et al, 2016). In addition, this study also limits the company's performance variable to the performance of finance companies in Indonesia.Based on the previous description then in this study can formulated the problem as follows: (1).…”