Does Social Capital Increase Innovation Speed? Empirical Evidence from China

Abstract

Past studies have suggested that social capital is a sustainable competitive advantage that leads to sustainable organizational growth and performance. However, few studies have explored how innovation speed moderates the relationship between social capital and sustainable organizational performance in China where the government plays key roles in promoting sustainable development goals. This paper develops a “social capital-innovation speed-performance” framework to investigate the mechanism of social capital influencing innovation speed, which in turn affects sustainable organizational growth and performance. Based on data collected from 125 Chinese firms, hierarchical moderated regression analyses indicate that structural social capital positively affects sustainable organizational performance but has no significant impact on sustainable innovation speed; relational social capital has no significant impact on sustainable organizational performance and is negatively correlated with innovation speed; cognitive social capital positively correlates with sustainable organizational performance and affects innovation speed, and government ties affect sustainable organizational performance and positively impact innovation speed. The study findings suggest that in China, increasing government ties is the most important social capital in creating sustainable organizational growth and performance. Both cognitive social capital and government ties are conducive to accelerating innovation speed, which gives firms a sustainable competitive advantage to achieve sustainable organizational performance.