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Purpose

The present study investigates the role of social capital in promoting sustainable livelihood amongst indigenous women in India. The study further analyses the mediation effect of women entrepreneurship between social capital and livelihood promotion.

Design/methodology/approach

Structure equation modeling has been used to empirically examine the effect of social capital in promoting sustainable livelihood. The study has collected 612 samples from indigenous women entrepreneurs across Sundargarh and Koraput districts in Odisha.

Findings

The result highlighted the extensiveness of indigenous women entrepreneurs, who utilized their social capital to improve enterprise performance and livelihood conditions. It is witnessed that social capital has a direct and positive effect on uplifting the living standards of indigenous women. Furthermore, women entrepreneurship mediates the relationship between social capital and livelihood promotion of indigenous women.

Practical implications

The decision-makers, policy practitioners and government agencies must encourage more women's self-help groups to participate in entrepreneurial activities by utilizing social capital through government welfare programs.

Originality/value

The present study adds value to the existing literature on social capital, women entrepreneurship and sustainable livelihood by measuring the importance of social capital in achieving sustainable livelihood. This study will add knowledge to the existing theories and literature of social capital on its use and importance towards the benefit of society.

For a long time, achieving sustainable livelihoods for marginalised groups and households has been a prime and focused concern in India (Bhuiyan, 2011; Mishra and Debata, 2021). Sustainable livelihood refers to having sufficient and long-term economic security and resources that are essential to satisfy an individual's basic needs. The basic needs include; having sufficient food, healthcare services, education, shelter and community participation (Frankenberger and McCaston, 1998; Krantz, 2001). Although India is one of the fastest economies in the world, huge socioeconomic inequality continues to exist among vulnerable and disadvantaged groups (Akoijam, 2013; Davidson and Sanyal, 2017). Social capital has gained prominence among the development professionals' lexicon, but there is not much consensus regarding its definition and how it is reported and evaluated (Varekamp et al., 2015; Gayen et al., 2019). It is widely associated with concerned social and human relations in the public imagination (Coleman, 1988). It assists in addressing various development issues by focusing on the skills, abilities and potentials of the indigenous communities that occur at the grassroots level (Akram and Routray, 2013). It provides an effective and equitable channel for sustainable livelihood interventions (Nichols, 2021). Entrepreneurial activities applied with social capital, elevate social intelligence and better livelihood options (Osei and Zhuang, 2020).

In Indian and global contexts, several existing studies have assessed the influence of social capital on the advancement of living standards in various consequences (Cho et al., 2016). Winters et al. (2001) discussed the pivotal value of social capital in Latin America. Lyons and Snoxell (2005) used the theory of social capital to establish a framework for rural livelihoods and articulated the connection between social capital, social change and livelihood opportunities. Xu et al. (2019) and Xiong et al. (2021) explored the effect of social capital on achieving sustainable livelihood capabilities amongst the rural households in China. In remote areas, bridging and bonding social capital seemed to be important, whereas linking social capital has been effective in creating livelihood opportunities (Krishna, 2004; Naithani and Saha, 2021). Khosla and Jena (2020) examined the significance of social capital and livelihood development of the rural population of eastern India.

The aforementioned literature affirmed that there is enough evidence of the significance of social capital in promoting socioeconomic and livelihood development in the Indian and global context. However, there is a huge gap in examining the present context amongst the indigenous communities living in extremely remote areas. Therefore, the present article focusses on revisiting the gaps by incorporating the mediation role of women entrepreneurship between social capital and livelihood promotion of indigenous households. In this context, the present work is conducted amongst the indigenous women entrepreneurs of two tribal-dominated districts, namely Sundargarh and Koraput in Odisha. The remaining portion of the article has been organised in the further section. Section two analyses the various existing literature in the Indian and global context. Section three contains the formulation of the hypothesis and the development of the conceptual model. The fourth section explains the methodology and data frame. The fifth section discusses the results of the data. The sixth section explains the findings and discussion. Finally, the policy implications and conclusions are discussed.

Social capital refers to the interpersonal relations within a well-defined social group, which permits its members to cooperate in achieving their goals (Putnam, 1995). It delivers a real-time opportunity for social connection that enlarges women’s communal networks (Davidson and Sanyal, 2017). Moreover, it promotes a spontaneous transaction network and relationship amongst group members (Woolcock, 1998). It should be treated as a mutual reliance of individuals that is formed based on the needs of associated members. Further, it provides a support system to the associated members for collective gain (Mahato et al., 2022). The livelihood problems of indigenous women cannot be solved with individual effort and hence, require a collective approach. Self-help groups create a strong social capital amongst their group members and are successful in promoting microenterprise, self-employment and improving the living conditions of the rural households (Suprabha, 2014). Factors such as education, income sources, active participation, skill training, motivation, leadership and managerial skills add significant value to run an enterprise effectively (Singh and Belwal, 2008; Ukanwa et al., 2018). Establishment of interpersonal social capital amongst group members offers innumerable opportunities, such as gaining market knowledge and enhancing business growth and performance. Social capital has a substantial effect on women entrepreneurship when employed as a fuel source of effectiveness (Al Mamun et al., 2016). Effective interpersonal relationship promotes innovative ideas, approach and processes for female entrepreneurs (Babajide et al., 2022). Self-help groups incorporate the features of social capital as one of the hidden resources that preserve long-term relationships amongst their group members (Roxas and Azmat, 2014).

In recent times, women entrepreneurship has emerged as one of the most innovative and necessary techniques in addressing socioeconomic issues, specifically in rural India (Mishra and Debata, 2021). Women entrepreneurship is the process by which women are involved in developing their businesses through innovative ideas and activities (Abdo and Kerbage, 2012). According to the theory of resource-based entrepreneurship, women's prospect of becoming entrepreneurs is strongly affected by their access to valuable and exclusive resources (Roxas and Azmat, 2014). Access to finance, social capital and human capital are significant in addition to marketing promotion in assisting community women entrepreneurs (McKeever et al., 2014). Individuals who are embroiled in pre-entrepreneurship systems seem to be more inclined towards engaging in entrepreneurship (Ribeiro-Soriano, 2017). Women entrepreneurs reassign available resources to produce more effective outcomes to improve the current systems. They promote sustainable livelihood by creating a source of income, rural employment and infrastructure development (Mahajan and Bandyopadhyay, 2021).

Several previous studies have witnessed the fact that women entrepreneurship serves as a change agent for economic development in developing economies (Alvarez and Barney, 2014; Sahu et al., 2021). Even though women entrepreneurship is a challenging task for the communities that are highly susceptible in many ways; they bring significant changes both at the community and the individual levels by employing their knowledge and capabilities (Kevane and Wydick, 2001). Women entrepreneurship is essential to a country's economic development since it promotes self-employment, regular sources of earnings and improved living conditions amongst the rural masses (Mahato and Jha, 2023). Indigenous women are reluctant to start their businesses due to the scarcity of resource base. In such cases, social capital encourages the task of enterprise development. A women entrepreneur learns through inspection, civic engagement, experience and successes and failures (Lenka and Agarwal, 2017). Entrepreneurial learning nurtures the social, interpersonal and business skills of entrepreneurs. An enterprise's performance is measured through its innovation, service quality, customer satisfaction and profitability (Suprabha, 2014). The growth of women enterprises is solely dependent on personal factors encompassing knowledge, expertise and training; social factors of entrepreneurs, i.e. relatives, peers and mentors and external factors such as the role of government, non-governmental and banking institutions (Cho et al., 2016). It also enhances the women's involvement in the financial contribution of the family (Kapoor, 2019). Women entrepreneurship has been popularized as a driver of sustainable livelihood and poverty alleviation (Alvarez and Barney, 2014). The present study aims to measure the impact of social capital on the livelihood promotion among indigenous households. In addition, looking into the diverse benefits of women-owned enterprises, the study measures the mediating effect of women entrepreneurship between social capital and livelihood promotion.

Social capital enables women entrepreneurs to connect with creative ideas, techniques, practices, approaches, business opportunities and market access that are significant in the development and advancement of microenterprises (Oinas et al., 2020). It promotes information exchange, trust and commitment, deals with problems and appears to be effective for women entrepreneurs (Singh and Belwal, 2008; McKeever et al., 2014). It functions as a facilitator in gaining market position through innovation, technological advancement and bank alliances (Fornoni et al., 2012; Mahato et al., 2022). Women entrepreneurship should prioritise association and community engagement in their entrepreneurial activities along with technological advancement, business strategies, product promotion, income generation and employment creation (Hoang et al., 2016). Women entrepreneurs gain strength through their interpersonal relationships. Hence, social capital is crucial in boosting the growth and development of women-owned enterprises (Osei and Zhuang, 2020).

H1.

Social capital has a significant effect on women-owned entrepreneurial activities

Women entrepreneurship results in employment creation, livelihood promotion and inclusive growth (Lenka and Agarwal, 2017). The financial status of women entrepreneurs has improved in addition to their social advancement and accomplishment due to their success in business (Kevane and Wydick, 2001). Sustainable livelihood promotion is accelerated by the growth of women entrepreneurship in the rural economy (Mahato and Jha, 2023). Women entrepreneurs achieve various livelihood aspects such as; social identity, income growth and personal development (Chatterjee et al., 2018) and thus, the following hypothesis has been formulated.

H2.

Women entrepreneurship has a significant effect on the livelihood promotion of indigenous households

Social capital has considerably enhanced the rural poor’s financial situations, skills and capacity building among its group members (Carradore, 2022). There is a significant effect of social capital on socioeconomic development among rural households (Maclean, 2010; Swain and Varghese, 2011). Social capital boosts entrepreneurial gains and has a constructive impact on reducing poverty (Bhuiyan, 2011; Mahato et al., 2022). It can advance the women-owned enterprises and as an outcome, it influences the employment landscape, occupational status and standard of living of the participants (Nichols, 2021). It is hypothesized that social capital has a direct and indirect effect in promoting the livelihood of socioeconomic backward households, in which entrepreneurial activities amongst women can act as a mediating variable (Lindvert et al., 2017). Therefore, the following two assumptions are formulated in the study:

H3.

Social capital influences positively in improving the living standards of the indigenous households

H4.

Women entrepreneurship mediates the relationship between social capital and livelihood promotion.

The study used a positivist research philosophy and quantitative research methods to affirm a comprehensive evaluation of how social capital formed amongst women entrepreneurs affects sustainably achieving their livelihood and thus, the study evaluates the mediating effect of women entrepreneurship between social capital and livelihood promotion (Figure 1). As the study is empirical, the method of data collection used is a multistage random sampling. The respondents of the study are indigenous women, who are self-help group (SHG) members and are engaged in entrepreneurial activities or in short, indigenous women entrepreneurs, who have developed social capital within themselves intending to achieve sustainable livelihood.

Figure 1

Conceptual model

Figure 1

Conceptual model

Close modal

Odisha is one of the poorest states in India. Out of the total population, 22% of the total populations of the state are indigenous, who are highly vulnerable in terms of their livelihood (Chandramouli and General, 2011). In recent times, the movement of SHG has paced up amongst the indigenous women in the state; as affordable finance and social support motivates their intent. The study is conducted in two tribal-dominated districts, namely Sundargarh and Koraput in Odisha. These districts have more than 50% of the total population are scheduled tribes or indigenous. Sundargah is located in the north and Korapurt is situated in the southern part of Odisha. Tribes in both districts are highly vulnerable and backwards in the socioeconomic measures. The study is focussed only on the indigenous SHG, who have turned themselves into entrepreneurs. Based on the database of the National Rural Livelihood Mission, Kuarmunda block has the highest number of indigenous SHG; whilst in the case of Koraput district, Borigguma block has the highest number of indigenous SHG (NRLM, 2022). A total of 612 samples from indigenous self-help group members were collected across six villages; Kuarmunda, Gobira and Ratakhandi belong to the Kuarmunda block (Sungargarh) and the remaining three villages namely Borigumma, Kamara,and Dengapoda belong to the Borigumma block (Koraput) in Odisha.

To evaluate the conceptual model, a dual transcription procedure was employed to develop the survey questions. The questionnaire was created in English before being interpreted into Oriya. The survey questionnaire consists of four sections such as personal information, social capital (SC), women entrepreneurship (WOE) and livelihood promotion (LP). Primary data were collected from the indigenous women entrepreneurs through personal interviews by visiting the study areas such as Kuarmunda, Gobira, Ratakhandi, Borigumma, Kamara and Dengapoda. Using a seven-point Likert scale, all the constructs were measured from 1 (strongly disagree) to 7 (strongly agree) scale. The description of the respective items of each construct is shown in Table 1. Social capital was measured using four items, women entrepreneurship was measured using four items and livelihood promotion was measured using seven items. Initially, the researcher had collected 650 samples of women entrepreneurs but only 612 samples were reliable and further utilized for analysis in the study.

Table 1

Personal information of the respondents

Sl. No.ParticularsCategoriesFrequency (N = 612)Percentage (%)
1VillageKuarmunda12921
Gobira8614
Ratakhandi11018
Borigumma12220
Kamara9816
Dengapoda6711
2Age (in years)18–2522637
25–3519632
35–4516527
45 and above254
3EducationIlliterate44773
Primary10417
Middle6110
4Marital statusUnmarried7312
Married49681
Widow315
Divorced122
5Vulnerable categoryBPL card holder612100
Disabled8013
6Type of familyJoint437
Nuclear56993
7Associated with SHG0–5 years7312
5–10 years50883
>10 years315
8Monthly income (in rupees)Up to 5,0008013
5,000–10,00038663
10,000–15,00011619
15,000 and above315
9Engagement as an entrepreneur0–5 years9215
5–10 years49080
>10 years305

Source(s): Authors

Smart PLS 4 software has been used for statistical analysis of the structure equation modelling (SEM). SEM provides an easy, quick and higher degree of data interpretation of multiple circumstances and has advanced features in assessing the relationship between constructs and their indicators in one place. The SEM generally consists of a measurement model that checks the convergent validity and reliability, whereas the structural model is used for path analysis and hypothesis testing (Streiner, 2006).

SEM was analysed using the Smart PLS 4.0 software to conduct statistical analysis. First, the measurement model was assessed where the reliability and validity of factors or items and study constructs were analysed. Further, structural model analysis is conducted to assess the significance of the relationships between constructs and to validate the structural model.

In the following Table 1, the personal information of respondents is plotted in terms of village, age, education, marital status, vulnerable category, type of family, number of family members, association with SHG groups and monthly income. It shows that 69% are 18–35 years of age; 73% are illiterate; 81% are married; 83% of the women are associated with the group from 5 to 10 years and 63% of respondents earn a monthly income of 5,000–10,000 rupees.

In SEM, researchers first assess the measurement model and then the structural model. Smart PLS 4.0 was used to know the goodness of fit statistics, factor loadings of indicators, construct reliability and construct validity (convergent validity and discriminant validity) of the proposed structural model (Purwanto and Sudargini, 2021).

5.2.1 Goodness of fit statistics for the model

In smart PLS 4, the goodness of model fit can be assessed using the following three main indices, i.e. standardised root mean square residual (SRMR); Chi-square value (χ2) and normed fit index (NFI). SRMR value of below 0.08 and NFI value of greater than 0.9 suggests a good fit (Henseler and Sarstedt, 2013). The SRMR value of the model is 0.07, which is less than the required value of 0.08. The NFI is 0.843, which is almost near to the required limit of 0.9. These measurements suggested that the measurement model is fit for further analysis of the results (Table 2).

Table 2

Model fit of the structured model

IndicesRecommendedEstimated valueRemarks
Standardised root mean square residual (SRMR)<0.080.07Required level achieved
Chi-square (χ2)>0.01786.781Required level achieved
Normed fit index (NFI)Between 0 and 1 but >0.9 considered good fit0.843Moderately required level achieved

Source(s): Authors

5.2.2 Construct reliability and validity

In this article, the three constructs and their factors were examined for the reliability and validity test. Cronbach's alpha remains the most frequently used method in assessing the reliability of constructs. Table 3 provides the factor loadings of each item in the respective construct. The Cronbach’s alpha (α), composite reliability and factor loadings measure the reliability of the construct and items. However, the average variance extracted (AVE) is used to measure the convergent validity of study constructs. It is observed from the analysis that the factor loadings of each indicator are 0.7 and higher. Cronbach’s alpha and composite reliability of each construct are also greater than the threshold value, i.e. 0.7 and higher. Additionally, the value of AVE is also greater than the threshold value, i.e. 0.5 or higher (Kelloway, 1995; Bollen and Long, 1992). These results emphasised that study items and constructs are reliable and valid for structural model analysis.

Table 3

Result of convergent validity of the overall measurement model

Name of the constructItem codeFactor loadingst- valuep- valueReliabilityValidity
Cronbach’s alpha (α)CRAVE
Livelihood promotion (LP)LP10.73531.838***0.8480.8850.525
LP20.75231.898***
LP30.62819.388***
LP40.72531.425***
LP50.75137.690***
LP60.74234.603***
LP70.73232.639***
Women entrepreneruship (WOE)WOE10.88761.962***0.9010.9310.770
WOE20.91065.914***
WOE30.86557.516***
WOE40.84839.495***
Social capital (SC)SC10.82451.939***0.8520.9000.693
SC20.83660.460***
SC30.84868.612***
SC40.82150.118***

Note(s): *** represents the level of significance at p < 0.001

Source(s): Authors

5.2.3 Discriminant validity

Table 4 shows the discriminant validity, which refers to how well constructs are discriminatory to each other. In other words, it assures whether each construct of the theoretical model should not be related to each other. It is measured using the Fornell–Larcker criterion, where the diagonal values of each construct are obtained through the square root of their AVE (Purwanto and Sudargini, 2021). The following Table 4 shows that construct diagonal values are greater than the raw and column values. Thus, the measurements of each construct are discriminatory and valid for further analysis.

Table 4

Fornell and Larckner criterion

ConstructAverage variance extracted (AVE)Livelihood promotion (LP)Women entrepreneruship (WOE)Social capital (SC)
Livelihood promotion (LP)0.5250.725  
Women entrepreneruship (WOE)0.7700.5190.878 
Social capital (SC)0.6930.610.4380.832

Note(s): *Italic values are derived from squared root of AVE

Source(s): Authors’ calculation

Table 5 represents the direct, indirect and total effects among the constructs. This evidenced that the direct effect (β = 0.473) and indirect effect (β = 0.137) of social capital on the promotion of livelihood through women entrepreneurship are significant. The results witnessed that women entrepreneurship is a partial mediator in the relationship between social capital and livelihood promotion.

Table 5

Direct, indirect and total effects

PathCritical relation (t value)Direct effectsIndirect effectsTotal effects
WOE → LP8.2500.312***0.312***
SC → LP11.6350.473***0.137***0.610***
SC → WOE12.3920.438***0.438***

Note(s): ***significant at p < 0.001

Source(s): Authors

5.3.1 Significance of the hypothesised relationship

To assess the connection between the constructs, bootstrapping is conducted for structural model analysis in the Smart PLS 4 software. Table 6 and Figure 2 indicate the outcomes of the structural model assessment. It shows that social capital has a significant impact in promoting entrepreneurial activities or women entrepreneurship amongst the indigenous women in Odisha (β = 0.438***, t-value = 12.392; p < 0.001). Furthermore, the result highlighted that social capital has a positive effect in achieving sustainable livelihood amongst the study respondents (β = 0.473***, t-value = 11.635; p < 0.001). Similarly, women entrepreneurship also acts positively and significantly in promoting sustainable livelihood amongst indigenous women promotion (β = 0.312***, t-value = 8.250; p < 0.001) and women entrepreneurship partially mediates the relationship between social capital and livelihood promotion (β = 0.137***, t-value = 7.347; p < 0.001). This signified the acceptance of the proposed hypotheses in the study.

Table 6

Significance test of hypothesis

Hypothesized relationshipPath coefficients (β)Standard deviationt valuep valueDecision
Women entrepreneruship → Livelihood promotion0.3120.0388.250***Supported
Social capital → Livelihood promotion0.4730.04111.635***Supported
Social capital → Women entrepreneruship0.4380.03512.392***Supported
Social capital → Women entrepreneruship → Livelihood promotion0.1370.0197.347***Supported

Note(s): ***p value is significant at p < 0.001

Source(s): Authors

Figure 2

Structural model analysis

Figure 2

Structural model analysis

Close modal

The results of this analysis shed insights into the different prospects through which social capital and women entrepreneurship make a significant contribution on livelihood promotion amongst the indigenous women in Odisha. This indicates that social capital effects significantly on the development and effectiveness of women-owned enterprises and the promotion of sustainable livelihood. The results suggested that women entrepreneurs' social capital is relational, which is comprised of faith, commitments and mutual benefit with their social network and business relationship. The result signified social capital as a fruitful and intangible resource towards the growth and development of microenterprises (Swain and Varghese, 2011; Ghouse et al., 2021). The perspective of social capital amongst women entrepreneurs brings higher opportunities for business information, which is essential in boosting business growth and success. This finding is aligned with the studies of (Maclean, 2010; Light and Dana, 2013; Mahato and Jha, 2023), who proved that social capital is vital in professional and personal relationships in raising higher income and improving the livelihood conditions of women entrepreneurs. This result is also supported by the existing studies, i.e. Chatterjee et al. (2018), Osei and Zhuang (2020), who suggested that women entrepreneurs increase their entrepreneurial effectiveness through their interpersonal networks. In the study, indigenous women recognise belief and compassion as crucial features in broadening their business ventures. It is observed that women are the homemakers in most rural locations; however, they are capable in dealing with social problems (Chen et al., 2022). This study highlighted that indigenous members of SHG are effective in boosting entrepreneurial efficiency to enhance their socioeconomic and living standards.

Furthermore, the study revealed that expansion of social capital and enterprise development has a significant effect on livelihood promotion. It also evidenced that the involvement of indigenous women in entrepreneurial activities is amongst the most crucial tools for uplifting their standard of living. Social capital and women entrepreneurship have a positive impact on promoting the socioeconomic conditions of entrepreneurs on a sustainable basis. The results confirmed that women entrepreneurship partially mediates the connection between social capital and livelihood promotion among indigenous women. This result emphasized that women entrepreneurs who develop social capital with stakeholders, community leaders and customers increase their entrepreneurial growth. This result is supported by the existing studies (Fornoni et al., 2012; Lyons and Snoxell, 2005; Singh and Belwal, 2008). These findings emphasised the importance of social capital in boosting women-owned enterprises. To summarise, the findings of the study supported the idea that social capital has both direct and indirect effects in promoting sustainable livelihood through micro-entrepreneurship.

The results of the study suggested that the decision-makers, practitioners, development professionals, government agencies and other stakeholders must encourage more SHG to participate in entrepreneurial activities. They should know the importance of social capital whilst implementing welfare programmes. Think tanks and development agencies should inspire and motivate indigenous women to take up entrepreneurship as their livelihood activity in Odisha, particularly in the Koraput district. The results further highlighted that enterprise development ensures marginalised women to contribute and manage the social issues relating to economic inequality and enhances their living standards. There is a greater need for policies and measures to address the issue of gender biases and prejudices against women entrepreneurs viewing the dominance of men in the rural regions of society.

The present study has used SEM to examine the effect of social capital and women entrepreneurship on the promotion of sustainable livelihood of the indigenous women households residing in highly backward districts in Odisha. In this study, we focussed on the indigenous women entrepreneurs and their extensiveness in using social relations to enhance their enterprise performance in the Sundargarh and Koraput districts of Odisha. We observed that the strong network and community interactions of women entrepreneurs with their business stakeholders contribute significantly to their ability to recognize innovative ideas, emerging opportunities, new approaches and possibilities for expanding their entrepreneurial venture. Besides this, the results also indicated that social capital has an indirect effect in promoting better living standards amongst indigenous households through their entrepreneurial activities.

The study has a few limitations which can become scope for future research. First, the study was conducted only across the indigenous women entrepreneurs living in the highly backward regions of Odisha. Further studies can be conducted by evaluating the livelihood conditions of other marginalized women entrepreneurs residing across various parts of the country. Second, the study has used women entrepreneurship as the mediating variable, so other related moderating and mediating variables can also be evaluated between social capital and livelihood promotion in developing economies. Third, a comparative study can also be conducted between men and women microentrepreneurs regarding how efficiently they are using social capital towards livelihood development and poverty alleviation.

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