Impact of Financial, Natural, Human, and Social Capital on Psychological Well-Being: A Pre-Post Assessment Among Experimental and Control Groups

Abstract

Background: The psychological well-being of entrepreneurs and small business owners is shaped by different types of capital which include: financial, natural, human, and social resources. Economic volatility, credit or finance availability, business continuity, and social or community resources greatly affect behavioral and emotional health results. This phenomenon warrants an investigation of the capital components concerning their contribution to financial strain and psychological resilience.

Aim: The study is to determine the relationship between financial, natural, human and social capital with the psychological wellbeing of small and medium business owners and entrepreneurs in the noted commercial centers of Pakistan.

Method: Study employed pretest-posttest experimental design for this quantitative study. The locations of the study included Karachi, Lahore, Islamabad, Faisalabad, and Rawalpindi. The target population were entrepreneurs who run small businesses for a minimum period of three years. A probability sampling method was used to get a sample of 300 respondents who were then randomly divided into intervention (n=150) and control (n=150) groups. The research instruments included both tested and new-developed items: the Psychological Well-Being Scale (Ryff, 1989) and four capital surveys for assessing financial, natural, human, and social capital. Statistical analysis was performed with SPSS Version 28 and qualitative data generated through semi-structured interviews was analyzed with NVivo software.

Results: Pre and post assessments show that participants in the experimental group who were provided with social capital strategies and received financial literacy training alongside business sustainability guidance had substantial psychological well-being score improvements as compared to the control group. Reduced stress and increased resilience were attributed to enhanced human capital, social networks, and financial stability. The control group, however, demonstrated a lack of change and improvement when contrasted with the experimental group, showing the impact of the intervention.

Conclusion: Insights gained from the study illustrate that rounded interventions targeting financial, human and social capital during the entrepreneur’s activity greatly improves their psychological well-being. The pre-post assessment evaluation method reveals the impact practitioners with capital-based interventions have, calling for new policies and restructure strategies to address the need to support sustainable business development and strengthen mental health issues.