Family social capital as a mediator between socioemotional wealth and entrepreneurial orientation: evidence from Mexican SMEs

Abstract

Purpose The type of social capital among families involved in business, or family social capital, has both positive and negative effects on family firms. This paper aims to investigate the mediating role of social relationships of family business members between socioemotional wealth (SEW) and firms' entrepreneurial orientation. Design/methodology/approach The authors applied a survey conducted in the four main cities in Mexico. The sample consisted of 360 small and medium enterprise (SMEs). This study's research framework and hypothesis were tested using regression analysis and the structural equation modeling technique. Findings This study finds that not only does SEW strongly influence the entrepreneurial orientation of family firms, but this influence is also mediated by the capability of such families to develop their social capital. Research limitations/implications The results show the perspective of one person in the company. Though it is the person with the highest rank and presumably the person who thoroughly knows the company, there is always a possibility of bias, which may inflate the results presented in this paper. Practical implications Based on this study's results, family firms should continuously improve their entrepreneurial abilities to achieve sustainable competitive advantage. In addition, their unique family-related characteristics further enhance these strategic approaches' positive effects on relational capital development. Originality/value This work contributes to the academic literature on entrepreneurship and social capital. As a mediator between SEW and entrepreneurial orientation, family relational capital has been under-researched. The results of this study reveal significant implications for networking management and relational capital strategies for SMEs.