Integrating corporate governance, technological capabilities and social capital in the Zimbabwean manufacturing sector

Abstract

This research sought to integrate the three drivers of performance, namely corporate governance, social capital and technological capabilities. Antecedent research has examined these three individually and sometimes in pairs. This study is one of the first attempts to integrate the three drivers of performance in a workable model in the context of the Zimbabwe manufacturing sector. The drivers invariably affect one another in the performance agenda as social capital impacts on acquisition of technological capabilities, and they all need a certain level of corporate governance to impact performance. The motivation for the study was that since 2009 Zimbabwe has been recovering from a decade of economic upheaval (1999 to 2009). There is a need to provide empirical evidence and focus on what and how corporate governance, social capital and technological capabilities contribute towards better performance in the manufacturing industry. Literature was reviewed from both developed and developing countries as some of the aspects indicated exogenous influences. Literature from emerging economies such as China and South America was of particular interest, since Zimbabwe identifies more closely with them. The research was guided by the post positivism paradigm, which naturally led to a quantitative study method. A questionnaire was used to collect data from manufacturing firms in six sub-sectors that the government has earmarked to spearhead economic recovery. Statistical tests were carried out to validate the data. Econometric models were used for estimation. Results reveal that four of the corporate governance variables, three social capital variables and three technological capabilities variables were positively associated with firms' performance. Integrating these in a multivariate analysis turned up five variables that remain significant and address all the three issues affecting business performance. These are confirmed in the literature in terms of their impact on firm performance. However, further reading could be undertaken to look at each of these influences on firm performance, especially in emerging markets, as the majority of studies are from the developed world.