How does social capital influence the hospitality firm's financial performance? The moderating role of entrepreneurial activities

• The external social capital contributes to a hotel's financial performance.
• The interaction of external and internal social capital has a positive effect on financial performance.
• Innovation and corporate venturing enhance the relationship between financial performance and social capital.
• Hospitality firms deliberately implement strategies that enhance entrepreneurial activities.

Although previous studies have examined the relationship between social capital and firm performance under boundary conditions such as firm age, industry characteristics, and institutional conditions, the literature is silent on the types of firm activities linking social capital to financial performance. This study investigates the moderating role of firm-level entrepreneurial activities (service innovation, corporate venturing and strategic renewal) on the relationship between social capital and financial performance in a sample of Chinese hotels. The findings indicate that the interaction of external and internal social capital has a positive effect on financial performance. In addition, innovation and corporate venturing enhance the relationship between financial performance and social capital. To achieve a competitive advantage, hospitality firms should not only accumulate social capital but should also deliberately implement strategies that enhance entrepreneurial activities to fully unleash the potential of social capital.