Anand Jha accepted for publication in Small Business Economics
Mike Ilitch School of Business Associate Professor of Finance Anand Jha has had an article accepted for publication in Small Business Economics, which publishes original research addressing aspects of entrepreneurship and small business economics.
The article is titled “Social capital and small informal business productivity: The meditating roles of financing and customer relationships.”
How does an entrepreneur’s social capital improve small informal business productivity? Although studies have investigated this relationship, we still know little about the underlying theoretical mechanisms driving these findings. Using a unique Zambian Business Survey of 1,971 entrepreneurs administered by the World Bank, we find that an entrepreneur’s social capital facilitates small business productivity through the mediating channels of firm financing (i.e., credit from suppliers, credit to customers, loans from friends and family) and customer relationships (i.e., more customers). Our findings thus identify specific mechanisms that channel social capital toward an informal business’ productivity, which prior studies have overlooked.