Enterprise performance and the functional diversity of social capital
Entrepreneurial networks are multifunctional; they can be used to access information about technologies and markets or to reduce uncertainties. A network’s function affects its structure and both the magnitude and nature of the impact that it has on enterprise performance. Networks that reduce uncertainty are small and cohesive. They generate positive spillover effects, while having little overall effect on enterprise performance. Networks that provide access to information about technologies and markets are large and diverse. They have a significant effect on enterprise performance, but tend not to generate positive spillovers. Evidence from the Ghanaian manufacturing sector supports these propositions.
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- Schmitz, Hubert, 1982. "Growth constraints on small-scale manufacturing in developing countries: a critical review," World Development, Elsevier, vol. 10(6), pages 429-450, June.
- Udry, Christopher, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 495-526, July.
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