Social capital in Brazilian small-firm networks: the influence on business performance

Abstract

This article investigates the influence of social capital on the business performance of firms participating in Brazilian small-firm networks. The study was based on a survey of 213 firms from 34 different small-firm networks. Four hypotheses were formulated and tested through multiple linear statistical regressions. We analysed the effects of the entrepreneurs’ social capital in the following three dimensions: structural, relational and cognitive. In addition, we investigated how the centrality of the entrepreneur in the business network is related to its social capital. The results demonstrate the significant effects of the structural and relational dimensions of social capital on business performance and also show that entrepreneurs that occupy central positions in small-firm networks obtain benefits as social capital develops. This study contributes to the literature by showing that network managers can stimulate the development of social capital among members and positively influence the business performance of participating firms.

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