Does managerial capability always drive performance? Empirical examinations of small and medium firms (SMEs) in a developing economy

Purpose: The paper sought to uncover the conditions under which managerial capability enhances performance while considering the role of social capital within the unique boundary conditions created by competitive intensity. Design/methodology/approach: The authors use multi-source data from 206 managers and owners of SMEs from a Sub-Saharan African nation – Ghana. Findings: Using structural equation modeling (SEM) to analysis the data, the findings revealed that social capital serves as a mechanism through which managerial capability influences performance. Furthermore, the results indicate that competitive intensity does not significantly moderate this important indirect relationship. Implications: This study provides relevant knowledge for scholars, practitioners and policymakers on the role of managerial capability and how it may be harnessed in enhancing performance. Originality/value: This paper provides a holistic understanding of the capability performance relationship in attempts at extending the literature by examining social capital as a mediator and competitive intensity as a contingent factor of this important relationship in a conditional indirect model.