LEVERAGING SOCIAL CAPITAL FOR SUSTAINABLE COOPERATIVE PERFORMANCE: EVIDENCE ON THE MEDIATING ROLE OF COLLABORATIVE GOVERNANCE

Abstract

This study aims to examine the effect of social capital on cooperative sustainability performance and to investigate the mediating role of collaborative governance in the context of cooperatives in Riau Province, Indonesia. Drawing on Social Capital Theory and Collaborative Governance Theory, the study explains how relational resources embedded in cooperative communities are transformed into economic, social, and environmental sustainability outcomes. A quantitative explanatory approach was employed using a survey of cooperative managers, including chairpersons, secretaries, treasurers, and business unit managers. A total of 181 valid responses were analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM). The results reveal that social capital has a positive and significant direct effect on sustainability performance, although the magnitude of the effect is relatively modest. Social capital also exhibits a strong and significant influence on collaborative governance, which in turn has a substantial positive effect on sustainability performance. Furthermore, collaborative governance is found to significantly mediate the relationship between social capital and sustainability performance. These findings indicate that cooperative sustainability does not emerge automatically from social cohesion alone, but rather depends on the institutionalization of social capital through inclusive, transparent, and consensus-based governance mechanisms. This study contributes to the literature by providing a mechanism-based explanation of cooperative sustainability and offers practical insights for strengthening cooperative governance in support of the Sustainable Development Goals (SDGs).