Transforming Entrepreneurial Resources to Competitive Advantage: The Role of Social Capital and Marketing capability

Since small businesses are economic engines in many nations, the efforts to transform small business into competitive ones have come to a challenging issue. However, there is a gap in the entrepreneurship field, which is about limited and slow development of a cumulative body of knowledge, spring from lack of agreement on many key issues in entrepreneurship This study has intention to determine the impact of entrepreneurial orientation, social capital and entrepreneurial management of firm performance. To deal with complex relationship, the research framework involves mediating effect to refine theory. The structural equation model is tested with a survey on 390 respondents with SMEs context in Indonesia. The empirical result reveals that marketing capability has full mediating effect on relationship between firm performance and both entrepreneurial orientation and entrepreneurial management. Hence, the study indicates complementary mediating effect of marketing capability on the relation between social capital and firm performances. The contribution of this study confirms the resource-based theory, which transformed into dynamic capability approach. DOI: 10.5901/mjss.2016.v7n2s1p26