Social capital as competitive resource - a driver towards sustained competitive advantage among manufacturing MSMEs in emerging markets

  • Vidya Vinayachandran Amrita School of Arts and Sciences
  • Ambilysadanam Soman Ambily Amrita School of Arts and Sciences
Keywords: micro sector, small sector, medium sector, emerging economy, competitive resources, capabilities, social capital


The strength of an emerging economy are the Micro, Small and Medium Enterprises as they paramount the economy to a greater extent. Since, MSMEs plays a greater role in the creation of wealth in advanced countries, there shall be justification on the less contribution of the same in developing economy. India as a developing economy should foster their industrial productivity and manufacturing MSMEs have a major role. It is being argued that the micro and small firms are exposed to sickness to a larger extent due to resource scarcity (Mehta & Rajan, 2017). The present study analyses social capital as a resource from structural social capital dimensions of MSMEs with respect to Government organizations and commercial banks for strengthening social capital of manufacturing MSMEs. The study is conducted based on 90 manufacturing MSMEs in Kerala.

Author Biography

Vidya Vinayachandran, Amrita School of Arts and Sciences


Barney, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17 (1), 99–120.

Bates, T. (1990). Entrepreneur Human Capital Inputs and Small Business Longevity. The Review of Economics and Statistics, 72 (4), 551-559.

Beck, T., & Demirguc-Kunt, A. (2006). Small and medium-size enterprises: Access to finance as a growth constraint. Journal of Banking & Finance, 30 (11), 2931–2943.

‘Björn, J. (2004). Exploring Outsourcing Decisions using the Resource-based view of the firm. In BIR 2004 - 3rd International Conference on Perspectives in Business Informatics Research (pp. 1-16). Jönköping: Lund University. Retrieved from

Carraresi, L., Mamaqi, X., Albisu, L. M., & Banterle, A. (2012). Strategic Capabilities and Performance: An Application of Resource-Based View in Italian Food SMEs. Pp. 186-209 in U. Rickert & G. Schiefer (Eds.), System Dynamics and Innovation in Food Networks, Boon, DE: Universität Bonn-ILB Press.

Claridge, T. (2018). Dimensions of Social Capital - structural, cognitive, and relational. Social Capital Research, 1-4. Retrieved from

Conner, K.R., & Prahalad, C.K. (1996). A Resource-Based Theory of the Firm: Knowledge Versus Opportunism. Organization Science, 7 (5), 477–501.

de la Torre, A., Martínez Pería, M.S., & Schmukler, S.L. (2010). Bank involvement with SMEs: Beyond relationship lending. Journal of Banking & Finance, 34 (9), 2280–2293.

De, D. (2001). ‘Fostering Entrepreneurship in Europe.’ Pp. 107-128 in Entrepreneurship policy for the Future. A. Lundstrom & L. Stevenson, Stockholm, SE: Swedish Foundation for Small Business Research.

Dollinger, M. (1999). Entrepreneurship (2nd ed., pp. 1-562). U.S.A.: Prentice Hall. Retrieved from

Government of India (2011). Annual report of Ministry of Micro, Small and Medium Enterprises 2010–11. Ministry of Micro, Small and Medium Enterprises, New Delhi, India. Retrieved from

Grant, R. (1991). The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation. California Management Review, 33(3), 114-135. doi: 10.2307/41166664.

Greene, P.G., Brush, C.G., & Brown, T.E. (1997). Resources in Small Firms: An Exploratory Study. Journal of Small Business Strategy, 8 (2), 25–40.

Kerala State Planning Board. (2018). ECONOMIC REVIEW 2017 (pp. 1-412). Thiruvananthapuram: Government of Kerala. Retrieved from

Mehta, Y., & Rajan, A.J. (2017). Manufacturing Sectors in India: Outlook and Challenges. Procedia Engineering, 174, 90–104.

Ministry of MSME. (2017). Annual report 2017-18. Retrieved from Government of India website: (

Mukherji, R. (2009). The State, Economic Growth, and Development in India. India Review, 8(1), 81–106.

Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23 (2), 242–266.

Ngatno, Apriatni, E.P., & Widayanto (2016). Human Capital, Entrepreneurial Capital and SME’s Performance of traditional herbal industries in Central Java, Indonesia: The Mediating Effect of Competitive Advantage. Archives of Business Research, 4 (4), 9-25.

Peter, E.O., & Inegbenebor, A. (2009). Capacity of SMEs in Nigeria to Access Institutional Equity Finance. Research Journal of Business Management, 3 (1), 1–5.

Reynolds, P., Bygrave, W., Autio, E., Cox, L., & Hay, M. (2002). Global Entrepreneurship Monitor 2002 Executive Report (pp. 1-44). London: Ewing Marion Kauffman Foundation. Retrieved from http://file:///C:/Users/User/AppData/Local/Packages/Microsoft.MicrosoftEdge_8wekyb3d8bbwe/TempState/Downloads/1313076587GEM_2002_Global_Report.pdf.

Schultz, T.W. (1971). Investment in human capital : the role of education and of research. London, UK: The Free Press.

Shihadeh, F., Naradda Gamage, S., & Hannoon, A. (2019). The causal relationship between SME sustainability and banks’ risk. Economic Research-Ekonomska Istraživanja, 32(1), 2743-2760. doi: 10.1080/1331677x.2019.1655465.

Simbi, R. (2004). National Economic Consultative Forum. Report on the Policy Implementation Workshop For SMEs 25-27 October 2004. (Masters thesis). University of Nairobi. Retrieved from

Singh, J. (2013). Analysis of Trends in the Manufacturing Growth in Last Five years (2006-07 to 2011-12) (pp. 1-59). New Delhi: Ministry of Commerce & Industry.

UNCTAD. (2001). Improving the Competitiveness of SMEs in Developing Countries, 1–149. Retrieved from:

Verheul, I., Wennekers, S., Audretsch, D., & Thurik, T. (2001). An Eclectic Theory of Entrepreneurship: Policies, Institutions and Culture (pp. 1-48). Amsterdam and Rotterdam: Tinbergen Institute. Retrieved from

Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5 (2), 171-180.

Original Scientific Paper