Academic journal article Asian Social Science

Social Capital as a Source of Business Advantages for a Woman Entrepreneur in the Context of Small-Size Business

Academic journal article Asian Social Science

Social Capital as a Source of Business Advantages for a Woman Entrepreneur in the Context of Small-Size Business

Article excerpt

Abstract

Social capital can be defined as the totality of resources by virtue of possessing social ties. Grounded along the previous research, this research examines the relation between the social capital of woman entrepreneurs and their small companies' market performance mediated by competitive advantages. A survey of 257 entrepreneurs who is woman in Korea found that structural social capital and cognitive, social capital positively influence both differentiation advantage and cost advantage. The empirical results also indicate that those advantages affect market performance significantly. However, the impacts of relational social capital are not significant.

The main theoretical contribution of this study is that it confirms the importance of social capital for woman entrepreneurs. It also supports the relevance of social capital in producing competitive advantages which lead to a better market performance. This study provides woman entrepreneurs in SMBs with managerial implications. The result shows that woman entrepreneurs can create business advantage by creating social ties and promoting social capital.

Keywords: social capital, competitive advantage, market performance, woman entrepreneurs, SMB

1. Introduction

Creating own business has become a popular business trend in Korea. Since the 2000s, economic policies in Korea have refocused their attention from depending on the 'Chabol' to supporting SMEs in order to fortify the source of the national economy's competitive strength and to develop dynamic and creative economy. During the transition, women's role has been noteworthy and the number of woman entrepreneurs has increased.

Women who are vigorously pushing forward small business are a worldwide phenomenon. The pace of new business formation by women has out-paced the rate by men in the most countries already (Minniti & Naude 2010), and the issue of female entrepreneurship continues to draw substantial interest from the government, researcher and academics (Chung et al., 2012).

Nevertheless, today's woman entrepreneurs are facing many troubles in spite of their quantitative growth. They tend to small, weak and are not competitive yet. For example, more than 93% of woman entrepreneurs own small-scale enterprises that hire less than five people in Korea (Lee et al., 2011). The number of failed woman entrepreneurs is also rising quickly.

Thus, interpreting the success factors of woman entrepreneurs becomes a critical academic and managerial issue. The purpose of this study is to investigate the relationships between social capital and market performance to understand woman entrepreneurs working in small business. Understanding the meaning and value of social capital has become a considerably important research issue in social science given social capital's influence on a firm's ability to enhance the marketing capability (Adler & Kwon, 2002), and we believe that the social capital would be more important for woman entrepreneurs than for men counterparts. Some studies viewed gender difference as a key variable that influences entrepreneurship activities. These previous research results found men entrepreneurs have much stronger intentions to start their own business than women counterparts have (Sandra et al., 2006). However, some scholars argued that individual level variables such as gender were insufficient to explain who became an entrepreneur (Chung et al., 2012). A new research topic such as social capital can be a key to understand gender difference when the previous research results fail to reach an accord. .

The rest of this research progresses in the following order: a brief theoretical background of female entrepreneurship and social capital; a review of related literature, which leads to our research model conceptualization; an overview of research methodology and hypothesis of the current study; presentation of research findings, implications, and further research directions. …

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