Harnessing digital–relational synergies for sustainable SME performance: exploring the interplay between digital marketing and network capital in resource-constrained settings

Abstract

This study examines how Digital Marketing (DM) and Network Capital (NC) jointly influence the economic and social performance of small and medium-sized enterprises (SMEs) in Uganda. Drawing on the Resource-Based View, the Technology–Organization–Environment framework, and Network Theory, an explanatory mixed-methods design was employed. In the quantitative phase, survey data from 272 SMEs were analyzed using Hayes’ PROCESS macro (Model 1) with mean-centered predictors and bootstrapped standard errors. The results show that DM and NC independently enhance both economic and social performance; however, NC negatively moderates the DM–performance relationship, indicating a substitution rather than a complementary effect. Conditional effects reveal that DM significantly improves performance at low and moderate levels of NC but becomes nonsignificant at high NC levels. The qualitative phase, based on 15 interviews, explains this pattern through managerial attention constraints, trust substitution, and digital cost frictions. Together, the findings advance a contextual threshold perspective, showing that digital strategies are most effective where relational capital is limited, while dense networks dampen the marginal returns to digital investment in resource-constrained settings. Practically, the results suggest that SMEs should calibrate digital marketing investments to their relational context, prioritizing digital tools where network resources are weak and avoiding overinvestment where strong relational ties.