The role of human resource management practices in shaping social capital and enhancing financial performance of SMEs

Economic Annals-XXI: Volume 212, Issue (11-12), Pages: 22-26

Citation information
Botirov, A., Fayziev, S., Yakhshiboev, J., Jabborov, Kh., Malikova, U., & Narzullaeva, M. (2024). The role of human resource management practices in shaping social capital and enhancing financial performance of SMEs. Economic Annals-XXI, 212(11-12), 22-26. doi: https://doi.org/10.21003/ea.V212-04

Azamat Botirov
PhD (Economics),
Department of Corporate Finance and Securities,
Tashkent State University of Economics
49 Islam Karimov Str., Tashkent, 100066, Uzbekistan
a.botirov@tsue.uz
ORCID ID: https://orcid.org/0009-0003-9185-0712

Samandar Fayziev
PhD (Economics),
Department of Corporate Finance and Securities,
Tashkent State University of Economics
49 Islam Karimov Str., Tashkent, 100066, Uzbekistan
s.fayziyev@tsue.uz
ORCID ID: https://orcid.org/0009-0008-6669-2595

Jakhongir Yakhshiboyev
MA (Economics),
Department of Corporate Finance and Securities,
Tashkent State University of Economics
49 Islam Karimov Str., Tashkent, 100066, Uzbekistan
j.yakhshiboyev@tsue.uz
ORCID ID: https://orcid.org/0009-0005-8788-4391

Khurshid Jabborov
MA (Economics),
Department of Corporate Finance and Securities,
Tashkent State University of Economics
49 Islam Karimov Str., Tashkent, 100066, Uzbekistan
kh.jabborov@tsue.uz
ORCID ID: https://orcid.org/0009-0001-1579-0303

Ug`iloy Malikova
MA (Economics),
Department of Corporate Finance and Securities,
Tashkent State University of Economics
49 Islam Karimov Str., Tashkent, 100066, Uzbekistan
u.malikova@tsue.uz
ORCID ID: https://orcid.org/0009-0003-1714-2283

Mehrangiz Narzullaeva
MA (Management),
Department of Corporate Finance and Securities,
Tashkent State University of Economics
49 Islam Karimov Str., Tashkent, 100066, Uzbekistan
m.narzullaeva@tsue.uz
ORCID ID: https://orcid.org/0009-0007-2133-2046

The role of human resource management practices in shaping social capital and enhancing financial performance of SMEs

Abstract. The aim of this study is to investigate how the activities of human resource management affect the indicators of social capital and the financial performance of small and medium-sized enterprises (SMEs) in Uzbekistan. Since SMEs are very important in the economy of Uzbekistan (they provide 78% of employment and 54% of GDP in 2024), it is important to identify what factors affect their success. Data were collected from 250 managers and employees of 80 SMEs in the Tashkent, Samarkand, and Bukhara regions via standardized questionnaires and were analyzed via structural equation modeling (SEM) and SmartPLS software. Preliminary results indicate that human resource management practices (training, employee involvement, and reward systems) significantly and positively impact increasing social capital (communication networks, organizational trust, and norms of cooperation). And lastly, augmenting social capital indirectly (with a path coefficient of 0.45) and directly (with a coefficient of 0.32) affects financial performance. Policy-makers and SME managers can effectively utilize such insights in initiating human resource development programs and strengthening intra-organizational team work.

Keywords: Human Resource Management; HRM; Social Capital; Financial Performance; Small and Medium-Sized Enterprises; SMEs

JEL Classifications: Е24; Е41; Е64; I18; J28; J31

Acknowledgements and Funding: The authors received no direct funding for this research.

Contribution: The authors contributed equally to this work.

Data Availability Statement: The dataset is available from the authors upon request.

DOI: https://doi.org/10.21003/ea.V212-04

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Received 5.09.2024
Received in revised form 20.09.2024
Accepted 22.09.2024
Available online 28.12.2024