Social Capital, Business Stage, Business Type, and Indonesian SMEs' Performance: A Multi-group Approach

Purpose: This study aims to test the relationships among social capital, business stage and business type in predicting firm performance of Indonesian SMEs. Design/methodology/approach: Explanatory research by using multi group analysis was employed to answer the research questions. Findings: The results prove that social capital positively affects firm performance, both in creative and non-creative businesses, and also in businesses in any stages of life cycle. Research limitations/implications: This current study only looks at the demographic aspects of SMEs in Indonesia in the context of the type and life cycle of the business. Practical implications: Indonesian SMEs need to maintain the power of their social capital through customers and suppliers to improve firm performance even though they are in a generally unfavourable economic situation. Originality/value: By utilising multi-group analysis, it if found that in the context of Indonesian SMEs, any type of business and in any stage of the life cycle, social capital positively affects firm performance. Paper type: Research paper Keywords: Social capital, Business stage, Business type, Firm performance, Indonesian SMEs, COVID-19 pandemic
Introduction The COVID-19 pandemic crisis has hit lives for the past year and a half in Indonesia. The pressure of the COVID-19 pandemic crisis is being felt by the business [...]