INFLUENCE OF SOCIAL CAPITAL ON THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES) IN KADUNA STATE

Abstract

This study examines the impact of social capital on the performance of small and medium enterprises (SMEs) in Kaduna State, Nigeria. It focuses on three key dimensions of social capital, structural, relational, and cognitive and assesses their individual contributions to SME performance. While previous research has largely emphasized structural and relational dimensions, this study adopts a more holistic approach by incorporating all three. Data were collected from SMEs owners and managers across Kaduna State using a proportionate stratified sampling method. A total of 363 valid responses were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with Smart PLS 2. The findings indicate that structural, relational, and cognitive social capital each exert a positive and statistically significant influence on SME performance. Based on these results, the study recommends that SME owners and managers strengthen cognitive capabilities related to product development, service delivery, and business operations. In addition, they should foster innovation by continuously adapting their offerings and actively cultivating relational networks to support idea exchange and collaboration.