Social capital and internationalization of commercial banks in Kenya

Abstract

Purpose - Drawing on the internationalization concept, the study sought to delve into social capital and commercial banks' internationalization in Kenya. 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 internationalization of commercial banks. Theoretically, the study expanded the body of research by developing three arguments. 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 novelty of the study 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.