The effect of social network on SMES performance: The role of entrepreneurial resources as mediator

The main objective of this study is to analyze and identify the factors that influence firm performance from social relationships perspective. This study examines and reviews factors such as network size, network density, network diversity and entrepreneurial resources. In particular, the goal of this study is to determine how social relations efforts effect firm performance. This is a quantitative study using survey method data collection. The respondent consists of Malay entrepreneurs in the Halal food industry in Peninsular Malaysia. Thirty-two main hypotheses were proposed that might influence firm performance, but only fifteen hypotheses were supported. Random sampling techniques consisting of fifty-eight items were used to measure the variables of the study. The findings show that there is a relationship between network size, network density, network diversity and firm performance. The study also shows that entrepreneurial resources is a full mediator in the relationship to network density, and partial mediator to external network and network size with organizational effectiveness of firm performance, and the study also shows that entrepreneurial resources is a full mediator in the relationship between network density, and partial mediator to external network with the organizational growth of firm performance. In conclusion, this study strengthened the understanding of the theories introduced such as Social Network Theories, RBV Theories (Resource Based Theory) and DCT (Dynamic Capabilities Theory).