Spanning the boundaries through creative deployment of social capital: A study of Russian SMEs

Abstract

This paper examines the role played by the structural dimension of organizational social capital in exploring developmental opportunities available to Russian SMEs. The study presents an analysis of horizontal and vertical relational ties established and maintained by traditional small and medium-sized firms in order to grow their business. Statistical analysis of 71 SMEs shows that horizontal bridging relations support and enhance SME development, and increase the likelihood of SME internationalization. Environmental uncertainty also contributes to SMEs involvement in building extensive business networking. Supplementary follow-up interviews were conducted with the owners and managers of SMEs to advance the results of hypotheses testing. The findings indicate that the boundary-spanning effect of bridging ties is consistent across both emerging and developed economies. SMEs use their bridging relations as resource-accumulating tool that may gradually lead to internationalization. Horizontal ties support collaboration with business partners and customers, and vertical ties provide stability in risky and uncertain environment. This study contributes to the growing body of social capital research highlighting the important role played by bridging connections in supporting SME resourcing and development across multiple industry settings, and in various types of economic conditions.