Social capital, decision-making and capital resource acquisition: a case study of Pakistani immigrants in Gauteng

Moti, Mahad
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Social capital is the advantage and opportunity a person gets from belonging to a community and includes the resources that are acquired from social ties. Despite the contributions made by SMMEs to the economy, most are unable to survive the early stages, with more than 70 percent of SMMEs failing within three years of inception. This study seeks to determine how SMMEs can use social capital to overcome challenges and address their shortcomings, by finding a relationship between social capital (divided into community and government) as the dependent variable, and decision-making, human capital, and financial capital as the independent variables. The focus of this study was Pakistani immigrants that engage in entrepreneurial activities, be they formal or informal, in Johannesburg, Gauteng, and the utilisation of their social networks to make faster and better decisions and acquire capital resources. This was a positivist, cross-sectional, quantitative, primary study, where the data was collected using a questionnaire based on several previous studies. The data was analysed using correlation analysis, exploratory factor analysis and multiple regression analysis It was found that only social capital (government) had a significant positive relationship with financial capital. All other relationships were found to be either insignificant or negative. This finding could support the Department of Small Business Development and other relevant stakeholders in channelling their resources towards helping SMMEs create social capital. The commercial impact of this study is focused on lenders, primarily banks, who are not issuing loans to SMMEs, this study shows that, social capital (community and government) can become a tool for banks to use when granting loans. The implications for societies and communities are that they can actively seek to create connections that could benefit them and their businesses.
A research report submitted to the Faculty of Commerce, Law and Management, University of Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management specialising in Entrepreneurship and New Venture Creation, 2019
Moti, Mahad, 2019, Social capital, decision-making and capital resource acquisition :|ba case study of Pakistani immigrants in Gauteng, University of the Witwatersrand,