The Effect of Social Capital on the Growth of Medium Enterprises in Kenya

The general objective of the study was to establish the effect of social capital on the growth of medium enterprises in the service sector in Kisumu City, Kenya. To achieve this objective, the study was guided by the following specific objectives; to determine the effect of structural social capital on the growth of medium enterprises, to determine the effect of relational social capital on the growth of medium enterprises and thirdly, to determine the effect of cognitive social capital on the growth of medium enterprises in Kisumu City. The study adopted a descriptive correlation research design. The population consisted of 142 CEOs or persons in charge of key departments of registered medium enterprises operating in the service sector in Kisumu City. Stratified sampling technique was used to sample 116 CEOs from the total population, however only 102 out of the 116 responded. A structured questionnaire was adopted as data collection tool. Data was analysed using descriptive statistical techniques which included frequencies and percentage distributions, mean and standard deviation. Inferential statistical techniques were also used and this included Pearson correlation and regression analysis. Data was analyzed using SPSS as a tool and the results and findings were presented in figures and tables. The findings on the effect of structural social capital on the growth of medium enterprises revealed that there was a statistically significant positive correlation between structural social capital and growth of medium enterprises, r (102)=.296, p<.05. The results of the linear regression indicated that structural social capital explained 8.7% of the variability of medium enterprises growth (R2=.087, F(1,99)=9.48, p<.05). The regression coefficient findings revealed that structural social capital predicted the growth of medium enterprises (β=.228, p<0.5). This implies that one unit increase of structural social capital would lead to an increase of 0.228 units of the growth of the medium enterprises. In relation to the effect of relational social capital on the growth of medium enterprises, the results showed that there was a statistically significant positive correlation between relational social capital and growth of medium enterprises, r(102)=.631, p<.05. The linear regression results indicated that relational social capital explained 39.9% of the variability of medium enterprises growth (R2=0.399, F(1,100)=66.32, p<.05). The regression coefficient findings revealed that relational social capital predicted the growth of medium enterprises (β=.696, p<0.5). This implies that one unit increase of relational social capital would lead to an increase of 0.696 units of the growth of the medium enterprises. The findings on the effect of cognitive social capital on the growth of medium enterprises revealed that there was a statistically significant positive correlation between cognitive social capital and growth of medium enterprises, r(102)=.408, p<.05. The results of the linear regression indicated that cognitive social capital explained 16.7% of the variability of medium enterprises growth (R2=0.167, F(1,100)=19.99, p<.05). The regression coefficient findings revealed that cognitive social capital predicted the growth of medium enterprises (β=.491, p