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.