The Role of Social Capital and ICT in Inter-Firm Collaboration on Syndicated Development Loans: An Empirical Study of the Finance Industry in Sri Lanka

Abstract

Social capital is an influential concept in understanding why and how some organisations do better in inter-organisational relations. It has been recognized as an important factor in developing relationships of trust, forming the foundation for greater collaboration among individuals, groups, and organisations. This paper presents findings from an empirical study that investigates the effect of multiple dimensions of Social Capital and Information and Communication Technologies (ICT) on inter-bank strategic collaboration in a developing context. Moreover, the study explores the moderating role of ICT capability in the inter-bank industry domain. This paper develops and presents a new theory on how social capital and ICT drive inter-firm partnerships. The theoretical model is validated using a quantitative approach to analyse survey and secondary data using Partial Least Squares Structural Equation Modelling. The findings of this study suggest that there is a strong positive combined effect of social capital and ICT towards inter-firm strategic alliances. The results contribute to both social capital theory and theories of ICT for development. It will also contribute to a more holistic perspective that incorporates social, technical, and organisational aspects for building effective strategies.