The evolution of inter-organisational social capital with foreign customers: Its direct and interactive effects on SMEs' foreign performance

Taking a longitudinal approach, we analyze how the evolution of different dimensions of social capital between an SME (Small and Medium enterprise) and its key foreign customers directly influences the firm's foreign performance growth. Moreover, we utilize a contingency approach by introducing two dyad-specific characteristics into the analysis: psychic and geographic interorganizational distances. Our findings contribute to the international business literature on social capital and suggest that while an investment in social capital with distant foreign customers always reinforces SMEs' foreign performance development, relational and cognitive social capital have the same positive effects only for low levels of interorganizational psychic distance.