Social capital and internationalization of commercial banks in Kenya


Keywords: social capital, internationalization, inter-cultural empathy, interpersonal impact, diplomacy

Abstract

Purpose – tо study sought to delve into social capital and commercial banks' internationalization in Kenya drawing on the internationalization concept.

Design/Method/Approach. The research adopted a positivist philosophical approach and used a descriptive cross-sectional research design targeting top and middle-level managers in Kenya's commercial banks. Data was collected using a structured questionnaire and analyzed using SPSS version 22.0 for both descriptive and inferential statistics. Structural Equation Modelling was used to establish the influence of social capital on commercial banks' internationalization in Kenya.

Findings. The findings established a significant and positive relationship between the components of social capital: inter-cultural empathy, inter- personal impact and diplomacy, and commercial banks' internationalization.

Practical implications. The results have significant consequences: Firstly, social capital has a positive and statistically significant relationship with commercial banks' internationalization. Secondly, all dimensions of social capital affect the acquisition of foreign market knowledge and financial resources. Thirdly, the use of individuals' social capital often changes during internationalization.

Originality/Value. The study's novelty demonstrates the interaction of commercial banks' managers in Kenya on the application of social capital as an internationalization orientation process.

Research Limitations/Future Research. The research contributes to the advancement of location theory. It opens avenues for future research to establish what extent social capital is beneficial to banks that have ventured into international markets.

Paper type – empirical.

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Author Biographies

Philip P. Omondi, NCBA Bank

Head of Trade Finance, NCBA Bank, Nairobi, Kenya

Joyce W. Ndegwa, United States International University-Africa, Nairobi, Kenya

PhD, Assistant Professor of Strategic Management, United States International University-Africa, Nairobi, Kenya

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Published
2020-06-25
How to Cite
Omondi, P., Ndegwa, J., & Okech, T. (2020). Social capital and internationalization of commercial banks in Kenya. European Journal of Management Issues, 28(1-2), 41-51. https://doi.org/10.15421/192005