The Role of Social Capital in Driving Innovation in Micro, Small, and Medium Enterprises (MSMEs): Insights from Nigeria
This study investigates the role of social capital in enhancing innovation among MSMEs in Nigeria. MSMEs are critical to Nigeria’s economy, contributing significantly to GDP and employment, however, they face challenges such as lack of institutional support, limited access to finance, inadequate infrastructure, and regulatory bottlenecks, which all hinder their ability to innovate. While social capital is recognized as a key driver of innovation, there is limited understanding of how its dimensions collectively drive innovation, particularly in resource-constrained environments. To address these gaps, this research adopts a multi-method approach integrating bibliometric analysis, systematic review, qualitative analysis, and mixed-method analysis. The first study analyses 78 peerreviewed documents (2004–2024). The findings show that the field is anchored in three interconnected theoretical streams: network theory, knowledge-based views, and organisational capability perspectives. Evidence also points to the unresolved theoretical debate regarding the most effective network configuration for innovation, which informed study 2. Building on this foundation, the second study systematically reviews 50 articles to evaluate network tie strength, Findings suggest both configurations are situationally valuable: cohesive or strong ties foster internal collaboration, while weak ties unlock novel knowledge flows. Beyond structural configurations, the review underscores the need to investigate the quality of relational ties that underpin these networks. The third study employs a qualitative multiple-case design using twelve semi-structured interviews within Nigerian MSME owners and managers in the textile sector. Data were analysed using NVivo-based thematic coding to identify mechanisms linking relational ties and innovation outcomes. Findings show that trust, cooperation, and reciprocity provide relational stability that supports resource sharing, knowledge circulation, and incremental process improvements, while identification expressed through shared craft pride and community belonging emerges as a key driver of product innovation. These patterns signalled the need for broader contextual explanation, leading to the fourth study, which adopts a mixed-method design using PLS-SEM and NVivo to examine how structural, relational, and cognitive social capital jointly shape innovation. Drawing on survey data from 564 MSMEs and qualitative interviews with 12 owners and managers, the study finds that structural and cognitive social capital are significant drivers of MSME innovation, while the relational dimension has a more context-dependent effect. Collectively, the four studies highlight the importance of integrating all three dimensions to support evidence-based decision-making for MSME managers and policymakers.
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