Social Capital and Entrepreneurship

64 Pages Posted: 24 Oct 2006

See all articles by Phillip H. Kim

Phillip H. Kim

University of North Carolina (UNC) at Chapel Hill - Department of Sociology; now Publishers Inc.

Howard E. Aldrich

University of North Carolina (UNC) at Chapel Hill - Department of Sociology; University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

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. and Aldrich, Howard E., Social Capital and Entrepreneurship. Foundations and Trends in Entrepreneurship, Vol. 1, No. 2, p. 64, July 2005. Available at SSRN: https://ssrn.com/abstract=939776

Phillip H. Kim

University of North Carolina (UNC) at Chapel Hill - Department of Sociology ( email )

Chapel Hill, NC 27599
United States

now Publishers Inc. ( email )

P.O. Box 1024
Hanover, 02339
United States

Howard E. Aldrich (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Department of Sociology ( email )

Chapel Hill, NC 27599
United States

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

McColl Building
Chapel Hill, NC 27599-3490
United States

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