Social capital for knowledge management: the case of SMEs in the Asia Pacific region

Abstract

This article presents a theoretical argument that the social capital of a community shapes the innovation performance of small and medium enterprises (SMEs) through knowledge management within the firm. Whilst social capital has gained popular currency in the international research and academic community, the current study attempts to deepen current understanding on the role of social capital in economic development, particularly at the firm level phenomenon involving SMEs. The study’s significance stems from the unprecedented effort of explaining how community social capital matters in the innovation performance of SMEs, a departure from previous studies which typically examined market-related or hierarchical social capital in the form of formal networks and directly linking them to a firm’s innovation performance without due regard to knowledge management within the firm as an antecedent of organizational innovation performance. The aim is to stimulate further thinking and empirical research on the subject of social capital of a community in the SME and/or entrepreneurial context.