Space and Social Capital: The Degree of Locality in Entrepreneurs' Contacts and its Consequences for Firm Success

Abstract

Social capital is valuable for entrepreneurs starting a business. Although many small businesses are located at the entrepreneurs' dwelling, little is known about entrepreneurs' local ties and their relevance for firm success. Distinguishing between local and non-local social capital, this contribution looks at the following:

• (1) The availability of local social capital

• (2) The relation between social capital and local social capital, and characteristics of firms and entrepreneurs

• (3) The relation between social capital and local social capital and firm performance

Analysing data from the Survey of the Social Networks of Entrepreneurs, which contains information on entrepreneurs and their networks in 141 Dutch neighbourhoods, this study finds a positive relation between social capital and firm performance.

Notes

See also Bourdieu (1980), Burt (1992); Flap and Boxman (2001) who apply this micro level perspective on social capital and emphasize its instrumental value.