International Journal of Commerce and Management Research

Authors
K Sambasiva Rao, Hailemariam Gebremichael

Abstract
The objective of this study was twofold. First, was to determine the relationship between social capital and innovation of firms. The other objective was to investigate the extent to which social capital has an impact on innovation of firms in Ethiopia. In this research social capital has been measured in three dimensions: structural, cognitive and relational dimensions of social capital. The researchers have tested individual and collective effect of these three dimensions of social capital on innovation of firms. Innovation has been measured by four parameters: product innovation, process innovation, organizational innovation, and marketing innovation. We used e-mailed survey among 137 tenant firms (firms which joined and/or graduated to/from the Business incubation centers available in Ethiopia) to collect the data and obtained 113 full responses which were appropriate for this research. The result of this study indicates that there exists very low negative but not statistically significant relationship between social capital and innovation of firms. Moreover, the result of this study shows that the three dimensions of social capital (structural, cognitive and relational) have no statistically significant impact on the likelihood of tenant firms to innovate.