“The evolution of inter-organizational social capital with foreign customers: its direct and interactive effect on SMEs’ foreign performance

While there is wide agreement that inter-organizational social capital is critical for the performance of small firms, there is a dearth of longitudinal empirical quantitative research on the dynamic interplay between social networks and foreign performance of SME. Moreover, few studies explicitly consider how the dynamic effects of inter-organizational social capital can be contingent on some dyadic relationships specific characteristics, such as size of partners, their localization and so on. In this paper, we analyze how the evolution over time of different dimensions of social capital – structural and relational/cognitive - between a SME and its foreign customers influences the firm’s foreign performance growth. Moreover, we utilize a contingency approach to discuss how structural and relational/cognitive social capital influences the growth of SME’s foreign performance, introducing two boundary partners’ specific characteristics: the size of foreign customers and the geographical distance between SME and its foreign customers. Our findings suggest that the investment in structural and relational/cognitive social capital with larger and very distant foreign customers are the necessary conditions needed to reinforce the SME’s economic performance development abroad. This research accordingly contributes to the international business literature and strategic management researches