Contrasting the Footloose Company: Social Capital, Organizational Fields and Culture

In this article, we build on the discussion in economic sociology literature about the embeddedness of economic actions. We argue that the idea of a “footloose” company (a business whose performance is relatively independent of location decisions) is based on a simplified understanding of the social embeddedness of companies. An organizational field approach offers an appropriate theoretical framework in which recent developments of economic sociology and regional studies can be integrated. We depict the concepts of regional (organizational) fields, social capital and culture as an analytical triangle for empirical investigations of the embeddedness of companies. Then, we apply and test the theoretical framework in an analysis of four regions investigated in the “Corporate Culture and Regional Embededness” project (Basel area, East Westphalia-Lippe, the Southeast Netherlands and the Györ region). From the empirical cases, we find strong support for the hypothesis that cultural embeddedness and long-term engagement within regions provide an added value for companies. This holds for companies with traditional roots in a region as well as for companies that are based within a region but are originally from outside. In the empirical cases, several manifestations of regional embeddedness can be distinguished.