SOCIAL CAPITAL AND THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN KADUNA METROPOLIS

Abstract

This study examined the effect of social capital on firm performance. Structural social capital, relational social capital and cognitive social capital are regarded as the most significant proxies for social capital. This study will thus assess the effect of structural social capital, relational social capital and cognitive social capital on the performance of Small and Medium Enterprises in Kaduna Metropolis. Thus, owners/managers of SMEs in Kaduna Metropolis formed the respondents of the study selected through proportionate stratified sampling technique. A total of 376 copies of questionnaires were analysed using partial least square structural equation modelling processed on SmartPls2. Based on the empirical analysis of the study, the study found out that structural social capital, relational social capital and relational social capital all have positive and significant effect on the performance of SMEs in Kaduna Metropolis. The study therefore recommends that managers and owners of SMEs should actively improve their cognitive abilities in their products or services and business processes. They should always ensure dramatic changes in their product or service lines. In addition, managers and owners of SMEs should ensure that their businesses are encouraged to engage in relational social capital with new ideas.