From Ties to Triumph: The Mediating Role of Opportunity Recognition in the Social Capital-Firm Performance Nexus
Year: 2026
Type: article
Abstract: In Bangladesh, where industrial infrastructure and capital markets are still nascent, small and medium-sized enterprises compensate for institutional gaps by driving inclusive growth. This study investigates how social capital, opportunity recognition and dynamic capabilities interact to shape the performance of small and medium-sized IT enterprises in Bangladesh. Although each construct has been linked individually to firm outcomes, their combined influence remains under-explored in emerging-economy contexts. Grounded in social capital theory, the study advances five hypotheses, positing that each of the three focal constructs directly influences firm performance and that these effects are partially transmitted through opportunity recognition. A partial least squares structural equation modelling (PLS-SEM) was used to analyse survey data collected from 270 IT and ITES decision-makers. The measurement model demonstrated high reliability along with robust convergent and discriminant validity, whereas the structural model accounted for a substantial portion of performance variance and exhibited strong out-of-sample predictive power. The findings indicate that social capital, opportunity recognition and dynamic capabilities have considerable positive impacts on IT firm performance. In addition, opportunity recognition partly mediates the relationships between social capital and dynamic capabilities and performance, implying that networks and dynamic routines improve performance partly via improving entrepreneurial alertness. The results contribute to the ability-based account by including relational, cognitive and organisational vantage points within the empirical context. It underscores the importance of purposeful network brokerage, institutionalised search routines and continuous capability upgrading and suggests that policy interventions should combine these levers to accelerate growth in the digital sector.
Source: Khulna University Studies
Institution: Khulna University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7221584437