The Impact of Social Capital on Market Power: Analysis of Competitive Advantage in Small Medium Enterprises

Suyanto, Suyanto and Pratono, Aluisius Hery (2013) The Impact of Social Capital on Market Power: Analysis of Competitive Advantage in Small Medium Enterprises. Project Report. Universitas Surabaya, Surabaya. (Unpublished)

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The impact of social capital on market power has been an interesting topic since the early 2000. The mainstream literature evaluates mainly on the impact of physical capital on the market power, whereas the new developed literature focuses also on the social capital in analyzing market power. In this present study, a comprehensive analysis on market power is based on two important determinants, entrepreneurial orientation and social capital. Entrepreneurship orientation is expected to contribute positively and significantly on market power. The same positive significant effect is also expected from social capital to market power. Using the sample of small and medium enterprises in East Java, this present study analyzes comprehensively the impact of social capital on market power. The analysis is performed on both quantitative data and qualitative data. The quantitative method includes reliability test, validity test, explanatory factor analysis of Kaiser-Meyer Olkin’s and Bartlett’s, and regression analysis. The qualitative method is based on an interpretative approach on interview, storytelling, narrative, and coding. The quantitative analysis finds out four important findings. Firstly, the data used in the analysis is reliable and uni-dimension, with 13 items of questions represent market power, 28 items of questions represent social capital, and 24 items of questions represent entrepreneurial orientation. Secondly, validity test confirms that the constructed dataset is valid to be used to perform factor analysis. Thirdly, the factor analysis shows that each latent variable has at least two items that forming specific patterns within the variable. Fourthly, the regression analysis indicates that sharing goal, relationship with suppliers, and relationship with distributors are three key factors of social capital that significant effects on market power The qualitative analysis finds five important points. Firstly, price reduction plays pivotal role in retail products with cross elasticity. Secondly, there is interdependence among firms on price strategy. Thirdly, there is a high dependence of observed firms on their suppliers. Fourthly, a specific social capital that related to staff relationship is an important factor in the observed small and medium enterprises. Fifthly, aggressiveness is not a nature of entrepreneurial orientation for the observed firms, which support the argument in hawk-dove game theory.

Item Type: Monograph (Project Report)
Uncontrolled Keywords: Market power, social capital, entrepreneurship orientation, small medium enterprises.
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
Divisions: Faculty of Business and Economic > Department of Economic
Depositing User: Suyanto 3198
Date Deposited: 26 May 2016 02:47
Last Modified: 24 Mar 2021 15:53

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