Exploring the Effect of Entrepreneurial Social Network on Human Capital and the Performance of Small and Medium Enterprises

Abstract

The paper was designed to examine the role of an entrepreneur’s social network and human capital on Small and Medium Enterprises (SMEs) performance in Nigeria. This study tries to find out if human capital moderates the relationship between social network and the SMEs performance in the country. Self-administered questionnaires were used to source data from a sample of 283 SMEs firms spread across Kano state in North-western Nigeria. Partial Least Squares Structural Equation Modelling (PLS-SEM) was utilized to test the hypotheses. The results obtained indicated that an entrepreneurial social network and human capital have significant positive effects on SMEs performance. Correspondingly, human capital moderates the relationship between the entrepreneur’s orientation and the performance of SMEs. The result implied that social network and human capital are essential drivers for firm performance. Finally, some of the study limitations include that the sample used in this study only involved SME’s that are registered with SMEDAN in the Kano state. Future research should use other samples from other parts of the country. Thus, future study should include additional variables that are not included in the current study.