How Social Capital Activates the Entrepreneurial Orientation of SMEs Performance in an Emerging Country in Covid-19 Pandemic

Abstract

The ability of small to medium enterprises (SMEs) to effectively carry out their business activities within and without their business social capital networks in Covid-19 pandemic in no doubt will increase their entrepreneurial orientation and performance especially in emerging countries like Ghana. The aim of this study is to investigate how social capital activates the entrepreneurial orientation (EO) of SMEs performance in an emerging country in Covid-19 pandemic. Through simple random sampling technique, data was obtained from 369 SME-owners and the analysis of the measurement and structural model performed by PLS-SEM approach. The findings demonstrated that social capital has significant effect on SMEs performance and proactiveness as well while autonomy, competitiveness, innovativeness and risk-taking though had positive effect were insignificant. The findings reveal that proactiveness had positive and significant mediating effect on social capital and SMEs performance relationship but the remaining four EO dimensions though demonstrates positive mediating effect but were not statistically significant. This study contributes to theoretical building on the role of social capital on EO and SMEs performance relationship especially in this global pandemic of Covid-19. The study focused on the need for SMEs to consider EO and social capital as pivotal to their performance based on the RBV and social capital theories with more emphasis on SMEs effective use of their internal and external resources to outperform their counterparts. The last section of the study further provides suggestions for SME-owners and future researchers.