60 / 2015-07-01 09:34:56

Effects of Social Capital on Internationalization Speed and Performance – Empirical Study of SMEs in Zhejiang

4606,6311,7293,7292,1127

This paper attempts to take a closer look at the effects of social capital on internationalization speed and performance of small and medium-sized enterprises (SMEs) in China. Based on social capital theory and international entrepreneurship literature, this paper proposes hypotheses concerning various aspects of social capital (e.g. the frequent and intensive participation in personal networks or frequency and intensity of ties with the government) and discusses their effects on both internationalization speed and performance of the SMEs. The hypotheses are tested on a sample of 99 SMEs located in Zhejiang (China). The data was exclusively collected for this study. The representative sample covers a wide range of manufacturing enterprises in the relevant region. The findings indicate that some aspects of social capital contribute to faster internationalization speed (e.g. inter-organizational networks) and superior performance (e.g. ties with financial institutions).