Rethinking the Relationship Between Relational Capital, Innovation, and SME Performance: A Critical Literature Review

Abstract

In an economic environment characterized by intensified competition and accelerating technological change, small and medium-sized enterprises (SMEs) increasingly rely on intangible resources to strengthen their competitive advantage. Among these resources, relational capital occupies a central position, as it encompasses the network of relationships that firms maintain with customers, suppliers, institutional partners, and, more broadly, their business environment. This article provides a critical review of the literature examining the relationships between relational capital, innovation, and firm performance in the specific context of SMEs. Drawing on a corpus of ten empirical studies identified through a systematic selection process conducted using the Scopus, Web of Science, and Google Scholar databases, with evidence from countries including Italy, Mexico, Taiwan, Spain, and Indonesia, the analysis highlights three main findings. First, relational capital emerges as a robust antecedent of SMEs’ innovation capabilities, encompassing both radical and incremental innovation. Second, this relationship frequently operates through mediating or intervening variables such as technological orientation, market orientation, and entrepreneurial orientation, although their effects on innovation vary across the contexts examined. Third, innovation most often acts as a transmission mechanism linking relational capital to overall firm performance, although this relationship is not always linear or unidirectional. Based on these findings, an integrative conceptual model is proposed, linking relational capital, technological orientation, innovation, and firm performance. The article concludes by discussing the limitations of the existing literature and identifying avenues for future research, particularly in the Moroccan context, where research on the relational capital of SMEs remains relatively underdeveloped.