Linkage between Relational Capital and Firm Performance: A Study in the Context of Clustered Clay Tiles Firms in Saltora Region in West Bengal, India Dibyendu Ghosh*, Soumyendra Kishore Datta** Abstract This paper seeks to analyse the impact of relational capital components on the performance of clay tiles clustered firms in Murlu, Saltora region of Bankura district, in the state of West Bengal in India. It is based on an assemblage of relational capital for assessing and determining the importance of relationships in the perspective of firm performance level. The study considered eight relational capital indicators for eliciting firm responses to the level of relational capital. A survey was conducted on 60 firms in the cluster. Cronbach’s alpha has been used to test the reliability of a series of individual components of relational capital. Principal component method was applied to derive the relational capital index based on all the indicator components. It is found to be strongly related to profitability performance. Overall, regression of the profitability figures carried out on individual relational capital components has yielded a significant outcome and some of the components are also found to have a significant impact on firm performance level. Based on the analysis, concrete suggestion is provided for spotting areas of relational capital, which, if handled and cultivated proficiently and deftly, can play a significant role in influencing firm performance level. Keywords: Relational Capital, Cronbach’s Alpha, Principal Component Analysis, Entrepreneurship, Regression * Research Scholar, Department of Economics, The University of Burdwan, Golapbag, Burdwan, West Bengal, India. Email: dibyendughosh458@gmail.com ** Professor, Department of Economics, The University of Burdwan, Golapbag, Burdwan, West Bengal, India. Email: soumyendra_d@redifmail.com Journal of Entrepreneurship and Management 9 (3) 2020, 01-11 http://publishingindia.com/jem/ Introducton In this globalised world, earning proft does not serve as the sole propeller of a frm’s action. In order to sustain the spirits of competition, maintaining or increasing the customer base, and enhancing the market share or total sales volume often tend to relegate the proft motive to the back in the process of the frm’s behaviour. In order to stave of globalised uncertainties in the business world, when the spirits of competition reign supreme, frms need to take cognisance of delicate adjustments in their business conduct in their niche neighbourhood, so that the business prospect turns in their favour. This calls for taking recourse to subtle behavioural actions on the part of frms that might provide a competitive edge over the others. This seems to depend on maintaining continuity in future expansion in the size of production, recruitment and retention of labour and customer base, and enjoying the easy availability of market information, knowledge, and inputs. In this sense, it cannot be denied that the frms need to maintain an amicable and warm relationship with all the stakeholders who may be directly or indirectly connected to their production cycle and fnal output disposal, for the prosperity of the enterprise. Efcient dealing with stakeholders helps build a strong bond or alliance that typically proves to be very successful for the enterprise in improving the quality of product, and prompting its production and/or reducing prices to stay competitive on the market.