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Social Capital and Entrepreneurship

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  • Kim, Phillip H.
  • Aldrich, Howard E.

Abstract

We offer a critical review of the concepts and principles of social capital and social networks as applied to entrepreneurship. Our review is intended for junior scholars and graduate students in the field of entrepreneurship who wish to learn the basic vocabulary of social network and social capital analyses. We illustrate several interesting research questions and a toolbox of methods to answer them. First, we use a popular new website, Friendster, to show the potential power of social capital accessed via social networks. Then, we show that the potential of social networks often cannot be realized because of various socio-cultural constraints. Taking account of these constraints, we offer three empirical generalizations about social networks and show how the concepts of homophily, social boundaries, and bounded rationality provide a framework for understanding the observations. As we discuss each generalization, we discuss some well-established theoretical contributions and empirical findings from the social capital and social networks literatures. Throughout the text we explain various research designs for studying social networks and issues raised in trying to use them. We conclude by noting the tension between the properties of social networks used in entrepreneurship researchers' models and the limited perspective on networks available to practicing entrepreneurs.

Suggested Citation

  • Kim, Phillip H. & Aldrich, Howard E., 2005. "Social Capital and Entrepreneurship," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 1(2), pages 55-104, June.
  • Handle: RePEc:now:fntent:0300000002
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    File URL: http://dx.doi.org/10.1561/0300000002
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    1. repec:kap:sbusec:v:51:y:2018:i:1:d:10.1007_s11187-017-9927-x is not listed on IDEAS
    2. Bosma, Niels & Hessels, Jolanda & Schutjens, Veronique & Praag, Mirjam Van & Verheul, Ingrid, 2012. "Entrepreneurship and role models," Journal of Economic Psychology, Elsevier, vol. 33(2), pages 410-424.
    3. Engel, Yuval & Kaandorp, Mariëtte & Elfring, Tom, 2017. "Toward a dynamic process model of entrepreneurial networking under uncertainty," Journal of Business Venturing, Elsevier, vol. 32(1), pages 35-51.
    4. Jack, Sarah L., 2010. "Approaches to studying networks: Implications and outcomes," Journal of Business Venturing, Elsevier, vol. 25(1), pages 120-137, January.
    5. Audretsch, David B. & Bönte, Werner & Tamvada, Jagannadha Pawan, 2013. "Religion, social class, and entrepreneurial choice," Journal of Business Venturing, Elsevier, vol. 28(6), pages 774-789.
    6. Hayter, Christopher S., 2016. "Constraining entrepreneurial development: A knowledge-based view of social networks among academic entrepreneurs," Research Policy, Elsevier, vol. 45(2), pages 475-490.
    7. Edward McKeever & Alistair Anderson & Sarah Jack, 2014. "Entrepreneurship and mutuality: social capital in processes and practices," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 26(5-6), pages 453-477, August.
    8. Obschonka, Martin & Silbereisen, Rainer K. & Schmitt-Rodermund, Eva & Stuetzer, Michael, 2010. "Nascent entrepreneurship and the developing individual: Early entrepreneurial competence in adolescence and venture creation success during the career," MPRA Paper 32021, University Library of Munich, Germany, revised 21 Dec 2010.
    9. Kuechle, Graciela, 2014. "Regional concentration of entrepreneurial activities," Journal of Economic Behavior & Organization, Elsevier, vol. 102(C), pages 59-73.
    10. Weber, Christiana & Weber, Barbara, 2011. "Exploring the antecedents of social liabilities in CVC triads--A dynamic social network perspective," Journal of Business Venturing, Elsevier, vol. 26(2), pages 255-272, March.
    11. Elert, Niklas & Henrekson, Magnus & Stenkula, Mikael, 2017. "Institutional Reform for Innovation and Entrepreneurship: An Agenda for Europe," Working Paper Series 1150, Research Institute of Industrial Economics, revised 16 Feb 2017.
    12. repec:eee:jobuve:v:5:y:2016:i:c:p:55-62 is not listed on IDEAS
    13. Goethner, Maximilian & Obschonka, Martin & Silbereisen, Rainer K. & Cantner, Uwe, 2012. "Scientists’ transition to academic entrepreneurship: Economic and psychological determinants," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 628-641.
    14. Zhang, Wei & White, Steven, 2016. "Overcoming the liability of newness: Entrepreneurial action and the emergence of China's private solar photovoltaic firms," Research Policy, Elsevier, vol. 45(3), pages 604-617.
    15. Bhagavatula, Suresh & Elfring, Tom & van Tilburg, Aad & van de Bunt, Gerhard G., 2010. "How social and human capital influence opportunity recognition and resource mobilization in India's handloom industry," Journal of Business Venturing, Elsevier, vol. 25(3), pages 245-260, May.
    16. repec:eee:jbvent:v:33:y:2018:i:3:p:278-295 is not listed on IDEAS

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