Corporate Social Capital and Firm Performance

48 Pages Posted: 30 Jul 2009 Last revised: 31 Jul 2009

See all articles by Laurence Lock Lee

Laurence Lock Lee

Optimice Pty Ltd - Social Network Analysis Specialists

James Guthrie

Macquarie University - Department of Accounting and Finance; University Of Bologna - Department of Management; Macquarie University, Macquarie Business School

Natalie Gallery

Queensland University of Technology

Date Written: July 29, 2009

Abstract

Traditional corporate social capital formulations have been based on a firm’s positioning within its network of market place alliances. This paper extends this model by incorporating additional firm status attributes into an integrated model for corporate social capital. An empirical study of some 155 firms in the global Information Technology sector was conducted, exploring the linkage between elements of corporate social capital and firm performance. A key contribution of this research is the specificity of the linkages identified between particular aspects of corporate social capital and firm performance. The results find that human capital is the most predictive of firm performance. Beyond human capital, a firm’s market network centrality and financial soundness were significant predictors for at least one firm performance measure. Surprisingly investments in internal capital and R&D were found in some circumstances to detract from a firm’s performance. Interestingly these effects were found to be moderated by financial soundness i.e. the negative effects were largely for firms with poor financial performance.

Keywords: Corporate Social Capital, Human Capital, Internal Capital, Centrality, Financial Soundness

JEL Classification: A13, B41, C81, D20, D40, L10, L63, L86, P13, P40

Suggested Citation

Lock Lee, Laurence and Guthrie, James and Gallery, Natalie, Corporate Social Capital and Firm Performance (July 29, 2009). Available at SSRN: https://ssrn.com/abstract=1441022 or http://dx.doi.org/10.2139/ssrn.1441022

Laurence Lock Lee (Contact Author)

Optimice Pty Ltd - Social Network Analysis Specialists ( email )

Australia

HOME PAGE: http://www.optimice.com.au

James Guthrie

Macquarie University - Department of Accounting and Finance ( email )

Sydney - NSW, 2109
Australia

University Of Bologna - Department of Management ( email )

P.Le Vittoria 15
Forli', 47121
Italy
+39-0543-374-621 (Phone)

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

Natalie Gallery

Queensland University of Technology ( email )

School of Accountancy
GPO Box 2434
Brisbane, Queensland 4001
Australia

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