Capitalizing on relationships, society, and spirituality: Drivers of production efficiency in Pakistani manufacturing SMEs

This study examines the impact of relational capital, social capital, and spiritual capital on the production efficiency of manufacturing SMEs in Pakistan. The research emplys a quantitative approch, utilizing a self administered questionnaire to gather data from 384 manufacturing SMEs across various sectors. The collected data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that relational and social capital positively influence production efficiency. These findings highlight the importance of building strong connections with external stakeholders, such as suppliers, customers, and business partners (relational capital), and also show the advantages of having good internal relationships, trust, and shared values within the organization (social capital). On the other hand, the analysis shows that spiritual capital does not have a statistically significant impact on PE. This study makes a significant contribution to the literature by highlighting the crucial role of relational and social capital in optimizing production efficiency in manufacturing SMEs in Pakistan. Overall, the results enhance the understanding of manufacturing SMEs by emphasizing the importance of relational and social capital for improving production efficiency. These findings provide valuable insights for the policymakers and practitioners in manufacturing organizations, owners of manufacturing firms, and researchers. Furthermore, the study provides a foundation for future research exploring the broder dimensions of intangible assets in emerging economies like Pakistan.