A Study Of The Relationship Between Social Capital And Firm Performance

Under the background of economic globalization with shorter product life cycle and complex technology,enterprises are paying more attention to maintaining,utilizing,and developing their social capital.Social capital theory examines the relationship between social networks and firm performance from the perspective of social resources.Social capital theory has attracted a lot of academic research in recent years.Past studies suggest that social capital can reduce transaction costs of enterprises and therefore improve firm performance.While government ties have been found to have a positive relationship with firm performance,government ties have not been incorporated in the social capital research.In addition,existing studies in social capital literature have not paid sufficient attention to organizational contingency factors that may moderate the relationship between social capital and firm performance.Moreover,how social capital affects firm performance remains a "black box".Results of literature review calls for additional research of mediating variables in the relationship between social capital and firm performance.There are three objectives of this study.The first obj ective is to incorporate government ties in the social capital construct.The second objective is to develop a theoretical model for investigating the relationship between social capital and firm performance.The third objective is to examine how innovation speed and innovation quality mediate the social capital-performance relationship.Based on the proposed theoretical model,eleven hypotheses are developed.To test the proposed theoretical model and the research hypotheses,a survey was conducted over a seven months period and complete data were collected from 125 companies in China.Hierarchical regression analyses were employed to test the research hypotheses.The empirical results suggest that:(1)Cognitive dimension and government ties are positively related with innovation speed,but relational dimension is negatively related with innovation speed;(2)Faster innovation speed leads to higher firm performance;(3)Structural dimension and cognitive dimension are positively related with innovation quality;(4)High innovation quality leads to better firm performance;(5)Innovation quality plays a partial mediating role in the relationship between social capital and firm performance;and(6)Competitive uncertainty partially moderates the effect of social capital on innovation quality.Theoretical and managerial implications are discussed.