The Application Of Social Exchange Theory By Entrepreneurs Leading Small Businesses In Appalachia

Entrepreneurs are the backbone of the U.S. economy and their small businesses represent the primary job source for American workers. Research exists on small business at a national and an international scale but a limited amount of region specific information exists in the literature. The purpose of the research is to explore the relationship between social capital and the failure or success of entrepreneurs who own businesses in Beckley, West Virginia, a small Appalachian town. The theoretical framework for this study is social exchange theory. This qualitative study used interpretive phenomenological analysis as the chosen research design because of the capability to query their lived experiences. The purposive sampling method was used. The twelve participants were divided into two groups consisting of failed businesses and successful businesses. The successful business has existed for more than five years. The failed business opened within the past five years but has closed. The answers provided by the participants addressed the problem of the high fail rate of small businesses in Appalachia. The findings of the study are important because the application of social exchanges by entrepreneurs was shown to increase the longevity of small businesses.