Social capital and SME performance: The moderating role of emotional intelligence

Abstract

Lack of extant studies on the moderating role of emotional intelligence on the relationship between social capital and firm performance necessitated this study. The purpose of this paper is to examine the extent to which emotional intelligence moderates the relationship between social capital and small and medium-scaled enterprises’ (SMEs’) performance.

Design/methodology/approach A total of 1,532 SMEs were selected through simple random sampling technique from a population of 5,009 SMEs. Structural equation modelling using AMOS was used to analyse the relationship between the variables.

Findings The results revealed that social capital has a positive and significant relationship with emotional intelligence. Moreover, the study also showed that emotional intelligence has a positive and significant relationship with SME performance. Finally, the study found that emotional intelligence enhances the relationship between social capital and SME performance.

Practical implications SME owner/managers are advised to enact policies that encourage the establishment of meaningful social networks and also help employees understand their emotions while creating social capital as both would help improve the performance of their firms.

Originality/value This paper breaks new ground by identifying emotional intelligence as an enabler of SMEs performance where there is adequate social capital.