Dynamic capabilities and enterprise growth: the mediating effect of networking

Abstract

PurposeEnterprise growth drives competitiveness, innovations, employment creation, income generation and social inclusion in societies. The purpose of this paper is to examine the mediating effect of networking on the relationship between dynamic capabilities and enterprise growth of financial cooperatives.Design/methodology/approachThis is a cross-sectional survey and quantitative study of 269 financial cooperatives based on structural equation modelling and bootstrapping techniques analysis.FindingsThe results reveal that dynamic capabilities are vital in promoting the growth of financial cooperatives. In addition, networking partially enhances the contribution of dynamic capabilities to the growth of financial cooperatives. Therefore, dynamic capabilities and networking play a key role in promoting the growth of financial cooperative enterprises.Research limitations/implicationsThis was a cross-sectional survey. It did not trace the changes in behavioural and attitudinal aspects of enterprise growth over time. A longitudinal approach is recommended.Practical implicationsIt is imperative that managers of financial cooperatives enhance their coordination, learning and competitive response capabilities through consultation, exchange and sharing of information among staff and other stakeholders, to increase the membership, capital and income volumes, depicting growth of financial cooperatives.Originality/valueThis study provides an insight on the mediating effect of networking on the enterprise growth of financial cooperatives in developing countries founded on networks theoretical framework. Unlike previous studies that modelled direct relationship of enterprise growth.