COMPETITIVE SOCIAL CAPITAL IN IMPROVING THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES): ROLE OF KNOWLEDGE DONATING AND KNOWLEDGE COLLECTING

Abstract

The primary aim of this research is to investigate and establish the significance of competitive social capital in augmenting the performance of craft (batik) small and medium-sized enterprises (SMEs) in the region of Central Java, Indonesia. This study centers its attention on the factors that influence knowledge donation and knowledge collection. The quantitative methodology used structural equation modelling with partial least squares (SEM-PLS). Participants were recruited from craft (batik) SMEs in the cities of Semarang, Pekalongan, Kudus, Pati and Solo through an online questionnaire. The study’s results suggest that engaging in knowledge donation and knowledge collecting has a positive and statistically significant influence on the competitive social capital and performance of SMEs. Both the processes of knowledge donation and knowledge collection are key elements in the construction and utilization of a resilient social network, which subsequently has positive impacts on performance. Moreover, it is important to acknowledge that competitive social capital might serve as a mediator in the causal relationship between knowledge donation, knowledge collecting, and business performance. This suggests that the existence of competitive social capital functions as a mechanism for linking the facilitation of knowledge donating and knowledge collecting, ultimately resulting in the development of business performance.