The Role of Human, Financial and Social Capital in the Performance of Small Businesses in Nigeria: A Second Look

The methodology adopted in this paper involved using a five likert scale measure to assign values to the impact of human, financial and social capital variables on a sample of 20 firms (12 manufacturing and 8 servicing), and then applying the Kruskal-Wallis analysis test to determine whether there is significant difference in the level of the impact of the three independent variables on the dependent variable (firm performance). Results indicate that two human capital variables, namely education and work experience, have a higher impact factor on both types of firms relative to the impact of family background, and owners ’ direct involvement. Measures of financial capital especially willingness to borrow has greater impact on manufacturing firms than on servicing firms. While measures of social capital especially it’s relational component has impact on both types of firms. The result of the Kruskal-Wallis analysis test suggests that the performance of small firms in Nigeria is essentially driven by all three factors (human, financial and social capital)