Vol. 11 No. 2 (2025)
June

Articles

The impact of social capital on the economic performance of Polish family businesses

Published 2025-06-30

  • Beata Żukowska

Beata Żukowska
Maria Curie-Sklodowska University in Lublin

Abstract

Objective: This article aims to examine how various dimensions of family social capital (FSC) impact the economic performance of small and medium-sized family firms in Poland.

Research Design & Methods: This study employs a quantitative research design. I collected data from a sample of 196 family businesses. Structural modelling methods served to analyse the relationships between structural, cognitive, and relational dimensions of FSC and economic performance.

Findings: The main empirical results indicate that cognitive dimension of FSC which includes shared identity, shared vision, and shared goals have a significant positive impact on the economic performance of family firms.

Implications & Recommendations: It is crucial for family business managers to actively create opportunities for shared experiences among family business members and build a common cognitive foundation. It is also recommended to establish effective communication channels to ensure the development and maintenance of shared meanings and interpretations and development and acceptance of common goals. Advisory services and policymakers should highlight the benefits derived from strong social capital and recommend strategies to strengthen the cognitive dimension of FSC.

Contribution & Value Added: The novelty of this article lies in the applying multidimensional FSC framework in the context of Polish family businesses. Since the research about family business social capital is treated as one of its unique resources, there is a scarce of studies how this resource works in the context of transitional economies such as Poland, and they are mainly theoretical (Popczyk, 2017) or qualitative (i.e. Marjański et al., 2019). This context is especially significant as many of these businesses are undergoing generational transfers for the first time now, leading to distinctive internal dynamics. Adopting the analytical method outlined by Carr (2011), this research implements a quantitative framework to analyse the FSC effects on the performance of family firm.

Keywords

family business, social capital, performances, PLS-SEM, transitional economy

(PDF) Save

Author Biography

Beata Żukowska

PhD in Economics and Finance, Assistant Professor at Maria Curie-Sklodowska University in Lublin (Poland). Her research interests include family businesses and their unique resources, strategies, and financial logic. She is also interested in corporate governance issues and business digital transformation.

References

  1. Amara, N., Lamari, M., & Landry, R. (2002). Does Social Capital Determine Innovation? To What Extent?. Technological Forecasting and Social Change, 69(7), 681-701. https://doi.org/10.1016/S0040-1625(01)00170-6
  2. Arregle, J.L., Hitt, M.A., Sirmon, D.G., & Very, P. (2007). The development of organizational social capital: Attributes of family firms. Journal of Management Studies, 44(1), 73-95. https://doi.org/10.1111/j.1467-6486.2007.00665.x
  3. Barros-Contreras, I., Pérez-Fernández, H., Martín-Cruz, N., & Hernangómez, B.J. (2023). Can we make family social capital flourish? The moderating role of generational involvement. Journal of Family and Economic Issues, 44(3), 655-673. https://doi.org/10.1007/s10834-022-09855-y
  4. Carr, J.C., Cole, M.S., Ring, J.K., & Blettner, D.P. (2011). A measure of variations in internal social capital among family firms. Entrepreneurship: Theory and Practice, 35(6), 1207-1227. https://doi.org/10.1111/j.1540-6520.2011.00499.x
  5. Casanueva-Rocha, C., Castro-Abancéns, I., & Galan-González, J.L. (2010). Social capital and innovation in industry clusters. Revista Europea de Dirección y Economía de la Empresa, 19(4), 37-58. Retrieved from https://www.researchgate.net/publication/289036116_Social_capital_and_innovation_in_industry_clusters on January 3, 2024.
  6. Cheung, G.W., Cooper-Thomas, H.D., Lau, R.S., & Wang, L.C. (2024). Reporting reliability, convergent and discriminant validity with structural equation modeling: A review and best-practice recommendations. Asia Pacific Journal of Management, 41(2), 745-783. https://doi.org/10.1007/s10490-023-09871-y
  7. Chua, J.H., Chrisman, J.J., Steier, L.P., & Rau, S.B. (2012). Sources of heterogeneity in family firms: An introduction. Entrepreneurship Theory and Practice, 36(6), 1103-1113. https://doi.org/10.1111/j.1540-6520.2012.00540.x
  8. Claridge, T. (2018). Functions of social capital – bonding, bridging, linking. Social Capital Research, January: 1-7. https://doi.org/10.5281/zenodo.7993853
  9. Cofré-Bravo, G., Klerkx, L., & Engler, A. (2019). Combinations of bonding, bridging, and linking social capital for farm innovation: How farmers configure different support networks. Journal of Rural Studies, 69(May), 53-64. https://doi.org/10.1016/j.jrurstud.2019.04.004
  10. Cruz, C., Justo, R., & De Castro, J.O. (2012). Does family employment enhance MSEs performance?: Integrating socioemotional wealth and family embeddedness perspectives. Journal of Business Venturing, 27(1), 62-76. https://doi.org/10.1016/j.jbusvent.2010.07.002
  11. Czapiński, J. (2008). Kapitał ludzki i kapitał społeczny a dobrobyt materialny. Polski paradoks. Zarządzanie Publiczne, 2(4), 5-28. Retrieved from https://publicgovernance.pl/zpub/article/view/91 on January 3, 2024.
  12. Dar, I.A., & Mishra, M. (2020). Dimensional impact of social capital on financial performance of SMEs. The Journal of Entrepreneurship, 29(1), 38-52. https://doi.org/10.1177/0971355719893499
  13. Daskalopoulos, E.T., & Machek, O. (2024). Leveraging social capital for digital transformation: The role of ambidexterity and familial orientation. The Journal of High Technology Management Research, 35(2), 100512, https://doi.org/10.1016/j.hitech.2024.100512
  14. Dess, G.G., & Robinson, Jr R.B. (1984). Measuring Organizational Performance in the Absence of Objective Measures: the Case of the Privately-held Firm and Conglomerate Business Unit. Strategic Management Journal, 5(August), 265-273. https://doi.org/10.1002/smj.4250050306
  15. Dobrowolski, Z., Sułkowski, Ł., Przytuła, S., & Rašticová, M. (2022). Do nepotism and cronyism have payoff boundaries?: a cross-country investigation. Problems and Perspectives in Management, 20(2). https://www.doi.org/10.21511/ppm.20(2).2022.19
  16. Eiteneyer, N., Bendig, D., & Brettel, M. (2019). Social capital and the digital crowd: Involving backers to promote new product innovativeness. Research Policy, 48(8), 103744, https://doi.org/10.1016/j.respol.2019.01.017
  17. Firfiray, S., Cruz, C., Neacsu, I., & Gomez-Mejia, L.R. (2018). Is nepotism so bad for family firms? A socioemotional wealth approach. Human Resource Management Review, 28(1), 83-97. https://doi.org/10.1016/j.hrmr.2017.05.008
  18. Fukuyama, F. (2002). Social Capital and Development: The Coming Agenda. SAIS Review, 22(1), 23-37. https://doi.org/10.1353/sais.2002.0009
  19. Fukuyama, F. (2003). Kapitał społeczny. In Harrison L.E., Huntington R. (Eds.), Kultura ma znaczenie (pp. 23-37). Warsaw: Zysk i S-ka.
  20. Gamage, S.K.N., Prasanna, R.P.I.R., Jayasundara, J.M.S.B., Ekanayake, E., Rajapakshe, P.S.K., Gaknj, A., Kumudumali, S.H.T., & Nedelea, A.M. (2020). Social capital and SME: A systematic literature review and research directions. Ecoforum Journal, 9(3). Retrieved from https://sdbindex.com/documents/00000399/00001-31143 on January 2, 2024.
  21. Gnan, L., Montemerlo, D., & Huse, M. (2015). Governance systems in family SMEs: The substitution effects between family councils and corporate governance mechanisms. Journal of Small Business Management, 53(2), 355-381. https://doi.org/10.1111/jsbm.12070
  22. Gómez-Mejía, L.R., Haynes, K.T., Núñez-Nickel, M., Jacobson, K.J., & Moyano-Fuentes, J. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52(1), 106-137. https://doi.org/10.2189/asqu.52.1.106
  23. Hair, Jr J.F., Hult, G.T.M., Ringle, C., & Sarstedt, M. (2016). A primer on partial least squares structural equation modeling (PLS-SEM). Sage publications.
  24. Herrero, I. (2018). How Familial Is Family Social Capital? Analyzing Bonding Social Capital in Family and Nonfamily Firms. Family Business Review, 31(4), 441-459. https://doi.org/10.1177/0894486518784475
  25. Herrero, I., & Hughes, M. (2019). When family social capital is too much of a good thing. Journal of Family Business Strategy, 10(3), 1-12. https://doi.org/10.1016/j.jfbs.2019.01.001
  26. Hu, L.T., & Bentler, P.M. (1998). Fit indices in covariance structure modeling: Sensitivity to underparameterized model misspecification. Psychological Methods, 3(4), 424. Retrieved from https://psycnet.apa.org/doi/10.1037/1082-989X.3.4.424 on October 1, 2024.
  27. Kanuk, L., & Berenson, C. (1975). Mail surveys and response rates: A literature review. Journal of Marketing Research, 12(4), 440-453. https://doi.org/10.1177/002224377501200408
  28. Katinienė, A., & Skačkauskienė, I. (2014). Managerial aspects of social capital. Mokslas–Lietuvos ateitis/Science–Future of Lithuania, 6(1), 25-32. https://doi.org/10.3846/MLA.2014.04
  29. Ketokivi, M.A., & Schroeder, R.G. (2004). Perceptual measures of performance: Fact or fiction?. Journal of Operations Management, 22(3), 247-264. https://doi.org/10.1016/j.jom.2002.07.001
  30. Klein, S.B. (2000). Family Businesses in Germany: Significance and Structure. Family Business Review, 13(3), 157-181. https://doi.org/10.1111/j.1741-6248.2000.00157.x
  31. Knack, S. (2002). Social Capital, Growth, and Poverty: A Survey of Cross-Country Evidence. In Grootaert W.C., van Bastelaer, T. (Eds.), The Role of Social Capital in Development: An Empirical Assessment (pp. 42-82), Cambridge University Press.
  32. Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of e-Collaboration (ijec), 11(4), 1-10. https://doi.org/10.4018/ijec.2015100101
  33. Koka, B.R., & Prescott, J.E. (2002). Strategic alliances as social capital: A multidimensional view. Strategic Management Journal, 23(9), 795-816. https://doi.org/10.1002/smj.252
  34. Koładkiewicz, I. (2015). System nadzoru w firmie rodzinnej. Doświadczenia polskie i światowe. Warsaw: Poltext.
  35. Lang, L.D., Behl, A., Phuong, N.N.D., Gaur, J., & Dzung, N.T. (2023). Toward SME digital transformation in the supply chain context: the role of structural social and human capital. International Journal of Physical Distribution & Logistics Management, 53(4), 448-466. https://doi.org/10.1108/IJPDLM-12-2021-0525
  36. Madani, A. (2018). SME policy: Comparative analysis of SME definitions. International Journal of Academic Research in Business and Social Sciences, 8(8), 103-14. https://doi.org/10.6007/IJARBSS/V8-I8/4443
  37. Mani, Y., & Lakhal, L. (2015). Exploring the family effect on firm performance: the impact of internal social capital dimensions on family firm performance. International Journal of Entrepreneurial Behavior & Research, 21(6), 898-917. https://doi.org/10.1108/IJEBR-06-2014-0100
  38. Marjański, A., Sułkowski, Ł., Marjańska-Potakowska, J., & Staniszewska, K. (2019). Social capital drives SME growth: A study of family firms in Poland. German Journal of Human Resource Management, 33(3), 280-304. https://doi.org/10.1177/2397002219847668
  39. Meyer, J.P. (2023). Social capital as the main driver of organizationally valuable innovation. European Journal of Innovation Management, 26(5), 1293-1311. https://doi.org/10.1108EJIM-09-2021-0458
  40. Nahapiet, J., & Goshal, S. (1998). Creating organizational capital through intellectual and social capital. Academy of Management Review, 23(2), 242-266. https://doi.org/10.5465/amr.1998.533225
  41. Parra‐Requena, G., Molina‐Morales, F.X., & García‐Villaverde, P.M. (2010). The mediating effect of cognitive social capital on knowledge acquisition in clustered firms. Growth and Change, 41(1), 59-84. https://doi.org/10.1111/j.1468-2257.2009.00516.x
  42. Pearson, A.W., Carr, J.C., & Shaw, J.C. (2008). Toward a Theory of Familiness: A Social Capital Perspective, Entrepreneurship Theory and Practice, 32(November), 949-969. https://doi.org/10.1111/j.1540-6520.2008.00265.x
  43. Pernsteiner, H., & Węcławski, J. (2016). How do Polish non-listed family firms engage in strong relationship banking?. In Asal M. (Ed.), Contemporary Problems in Corporate Governance (pp. 45-57). Publisher: Maher Asal.
  44. Popczyk, W. (2017). Family social capital versus nepotism in family businesses. In 5th RSEP Social Sciences Conference (pp. 47-52). https://doi.org/10.19275/RSEPCONFERENCES107
  45. Puffer, S.M., McCarthy, D.J., & Boisot, M. (2010). Entrepreneurship in Russia and China: The impact of formal institutional voids. Entrepreneurship Theory and Practice, 34(3), 441-467. https://doi.org/10.1111/j.1540-6520.2009.00353.x
  46. Raiser, M., Haerpfer, C., Nowotny, T., & Wallace, C. (2002). Social capital in transition: a first look at the evidence. Sociologický časopis/Czech Sociological Review, 693-720. Retrieved from https://www.jstor.org/stable/41131871 on January 4, 2024.
  47. Randolph, R.V., Alexander, B.N., Debicki, B.J., & Zajkowski, R. (2019). Untangling non-economic objectives in family and non-family SMEs: A goal systems approach. Journal of Business Research, 98(February), 317-327. https://doi.org/10.1016/j.jbusres.2019.02.017
  48. Ray, S., Danks, N.P., & Valdez, A.C. (2022). R Package Seminr: Domain-Specific Language for Building and Estimating Structural Equation Models. Retrieved from https://CRAN.R-project.org/package=seminr on October 1, 2024.
  49. Razzak, M.R., Jassem, S., Akter, A., & Al Mamun, S.A. (2021). Family commitment and performance in private family firms: moderating effect of professionalization. Journal of Small Business and Enterprise Development, 28(5), 669-689. https://doi.org/10.1108/JSBED-05-2019-0165
  50. Riley, M.R., Mohr, D.C., & Waddimba, A.C. (2018). The reliability and validity of three‐item screening measures for burnout: Evidence from group‐employed health care practitioners in upstate New York. Stress and Health, 34(1), 187-193. https://doi.org/10.1002/smi.2762
  51. Rodriguez-Garcia, P., & Menéndez-Requejo, S. (2023). Family constitution to manage family firms’ agency conflicts. BRQ Business Research Quarterly, 26(2), 150-166. https://doi.org/10.1177/2340944420980444
  52. Rosecká, N., & Machek, O. (2023). How relational conflict harms family firm performance: The mediating role of family social capital and the moderating role of family ownership. Journal of Family and Economic Issues, 44(4), 854-869. https://doi.org/10.1007/s10834-022-09877-6
  53. Sarstedt, M., Ringle, C.M., Smith, D., Reams, R., & Hair Jr, J.F. (2014). Partial least squares structural equation modeling (PLS-SEM), A useful tool for family business researchers. Journal of Family Business Strategy, 5(1), 105-115. https://doi.org/10.1016/j.jfbs.2014.01.002
  54. Sanchez-Ruiz, P., Daspit, J.J., Holt, D.T., & Rutherford, M.W. (2019). Family Social Capital in the Family Firm: A Taxonomic Classification, Relationships With Outcomes, and Directions for Advancement. Family Business Review, 32(2), 131-153. https://doi.org/10.1177/0894486519836833
  55. Sanchez-Famoso, V., Akhter, N., Iturralde, T., Chirico, F., & Maseda, A. (2015). Is non-family social capital also (or especially) important for family firm performance?. Human Relations, 68(11), 1713-1743. https://doi.org/10.1177/0018726714565724
  56. Santos, J.B., & Brito, L.A.L. (2012). Toward a subjective measurement model for firm performance. BAR – Brazilian Administration Review, 9(SPL. ISS), 95-117. https://doi.org/10.1590/S1807-76922012000500007
  57. Sarstedt, M., Ringle, C.M., Smith, D., Reams, R., & Hair Jr, J.F. (2014). Partial least squares structural equation modeling (PLS-SEM), A useful tool for family business researchers. Journal of Family Business Strategy, 5(1), 105-115. https://doi.org/10.1016/j.jfbs.2014.01.002
  58. Stasa Ouzký, M., & Machek, O. (2024). Family firm performance: the effects of organizational culture and organizational social capital. Journal of Family Business Management, 14(2), 353-373. https://doi.org/10.1108/JFBM-06-2023-0089
  59. Sułkowski, Ł. (2012). Problemy zarządzania zasobami ludzkimi w małych polskich firmach rodzinnych. Zarządzanie Zasobami Ludzkimi, 1(2), 9-18. Retrieved from https://cejsh.icm.edu.pl/cejsh/element/bwmeta1.element.cejsh-24dfc8de-fae2-4c84-8d2e-fe743af3a26fon October 3, 2024.
  60. Sundaramurthy, C. (2008). Sustaining trust within family businesses. Family Business Review, 21(1), 89-102. https://doi.org/10.1111/j.1741-6248.2007.00110.x
  61. Surdej, A., & Wach, K. (2012). The dynamics of succession in family businesses in Poland-Empirical results. Economia Marche: Journal of Applied Economics, 31(2), 109-128. Retrieved from https://ssrn.com/abstract=2210702 on October 3, 2024.
  62. Stam, W., Arzlanian, S., & Elfring, T. (2014). Social capital of entrepreneurs and small firm performance: A meta-analysis of contextual and methodological moderators. Journal of Business Venturing, 29(1), 152-173. https://doi.org/10.1016/j.jbusvent.2013.01.002
  63. Tasavori, M., Zaefarian, R., & Eng, T.Y. (2018). Internal social capital and international firm performance in emerging market family firms: The mediating role of participative governance. International Small Business Journal, 36(8), 887-910. https://doi.org/10.1177/0266242618773145
  64. Terry Kim, T., Lee, G., Paek, S., & Lee, S. (2013). Social capital, knowledge sharing and organizational performance: what structural relationship do they have in hotels?. International Journal of Contemporary Hospitality Management, 25(5), 683-704. https://doi.org/10.1108/IJCHM-Jan-2012-0010
  65. Urassa, G. (2016). Effects of nepotism and family conflicts on the performance of family-owned firms in Tanzania: contrasting views. Business Management Review, 18(1), 45-69. Retrieved from https://bmr.udsm.ac.tz/index.php/bmr/article/view/44 on October 2, 2024.
  66. Whiteley P. (2000). Economic growth and social capital. Political Studies, 48, 123-148. https://doi.org/10.1111/1467-9248.00269
  67. Woolcock, M., & Narayan, D. (2000). Social capital: implications for development theory, research, and policy (English). Washington, D.C.: World Bank Group. Retrieved from http://documents.worldbank.org/curated/en/961231468336675195/Social-capital-implications-for-development-theory-research-and-policy on October 14, 2024.
  68. Wu, W.P. (2008). Dimensions of social capital and firm competitiveness improvement: The mediating role of information sharing. Journal of Management Studies, 45(1), 122-146. https://doi.org/10.1111/j.1467-6486.2007.00741.x
  69. Zellweger, T.M., Kellermanns, F.W., Eddleston, K.A., & Memili, E. (2012). Building a family firm image: How family firms capitalize on their family ties. Journal of Family Business Strategy, 3(4), 239-250. https://doi.org/10.1016/j.jfbs.2012.10.001
  70. Zirena-Bejarano, P.P., Chavez Zirena, E.M., & Caryt Malaga, A.K. (2024). Cognitive social capital and new product performance: indirect effect of potential absorptive and innovation capacity: a tourism-based study. European Journal of Management and Business Economics. https://doi.org/10.1108/EJMBE-01-2023-0019
  71. Żukowska, B. (2021). Profesjonalizacja firm rodzinnych. Efekty ekonomiczne. Warsaw: C.H.Beck.
  72. Żukowska, B., Martyniuk, O., & Zajkowski, R. (2021). Mobilisation of survivability capital – family firm response to the coronavirus crisis. International Journal of Entrepreneurial Behaviour & Research, 27(9), 48-81. https://doi.org/10.1108/IJEBR-02-2021-0147

Downloads

Download data is not yet available.

Similar Articles

11-20 of 223

You may also start an advanced similarity search for this article.