Abstract

This research examines the relationship between social capital, information sharing, and innovation potential in Vietnam's small and medium-sized firms (SMEs). Utilizing social capital theory, the study formulates a conceptual framework to investigate how characteristics of social capital influence information exchange behaviors, hence promoting creativity at both individual and collective levels. The empirical research relies on survey data from 787 office personnel employed in Vietnamese SMEs. The study utilizes exploratory factor analysis (EFA), confirmatory factor analysis (CFA), and structural equation modeling (SEM) to authenticate the measurement constructs and examine the proposed correlations. The results indicate that several aspects of social capital, specifically social interaction links, trust, norms of reciprocity, group identification, and shared objectives, positively influence knowledge donation and knowledge acquisition. These knowledge-sharing systems subsequently augment organizations' innovative capacity, underscoring the pivotal importance of social capital in knowledge-driven organizational advancement. Among these aspects, trust stands out as a particularly complex factor. Findings indicate trust significantly enhances knowledge acquisition by reducing communication obstacles and fostering transparent information exchange. Nonetheless, its impact on knowledge donation is statistically negligible. This paradox is likely due to competitive organizational dynamics that hinder individuals' inclination to share knowledge, despite existing interpersonal trust voluntarily. This study enhances the theoretical comprehension of social capital's role as a catalyst for innovation by contextualizing the investigation within the framework of SMEs in developing countries. It emphasizes the significance of fostering robust social connections, rules of reciprocity, and common goals to cultivate a collaborative culture. The findings provide managerial insights for SME leaders: fostering mutual trust, creating incentives for information exchange, and enhancing group identity can substantially enhance sustainable innovation capability. This research enhances theoretical and managerial perspectives by elucidating how social capital converts into innovative outcomes in resource-limited organizational settings.