How Business Networking, and Dynamic Capabilities effect on Financial Performance of Social Enterprises: The Mediating Role of Innovation and Moderating Effect of Access to Finance

The goal of present research is to investigate the relationships between innovation, access to finance, business networking, dynamic capabilities, and financial performance in social enterprises. This study employs resource-based view theory, social network theory and pecking order theory. We conducted a cross-sectional survey involving a standardised questionnaire to gather primary data from 384 owners and managers of social enterprises. A simple random sampling technique was used. Partial least squares structural equation modelling was utilised to analyse the data. The results show that business networking has a significant positive relationship with innovation and financial performance. Moreover, there is also a positive and statistically significant correlation with innovation and financial performance. Innovation has a direct and significant positive relationship with financial performance. Access to finance contains a significant moderating role in the link between dynamic capabilities and innovation, but not moderating effect between business networking and innovation. Moreover, innovation has a positive mediating impact on the link between dynamic capabilities and financial performance, and also positive as well as significant effect on the link between business networking and financial performance. Therefore, this study suggests that social enterprises in Pakistan should prioritise business networking and dynamic capabilities in implementing innovative financial solutions to address financial challenges. These contributions are crucial for the overall welfare of the various stakeholders involved in social enterprises. This study is expected to assist regulators and policymakers in comprehending the challenges faced by SEs while establishing successful initiatives and interventions. Jel Code : D25, L14, L25, P33, O36, L31