Occasional Papers,
Uppsala University, Department of Business Studies

Abstract: This paper aims to explain the role of local context in the development of start-ups’ social networks, according to a sociological perspective of entrepreneurship, which considers social capital as a main factor of success for the growth of young firms. This research problem is dealt with in connection with the more consolidated theoretical studies of clustering phenomena, which have attributed to social networks a central role in explaining the concentration of the entrepreneurial process in restricted geographical areas. The research model adopted to measure social capital is based on a personal elaboration of the framework developed by Nahapiet and Ghoshal, which considers social capital as a heterogeneous resource, constituted by a structural, relational and cognitive component. The strong turn of external relationships by the start-ups can justify our choice to consider these as a unit of analysis. In particular, we analysed social capital in the dyads of networks between start-ups located in an industrial Italian cluster and their customers. The results of our analysis are quite contrasting with the most accredited hypotheses in the studies, showing that a strong incidence of the local factor can only partially help start-ups. A strong impact of local context, in fact, has a positive influence on the relational and cognitive dimension of social capital bringing the immediate advantage to reduce the costs of control and to develop trust in the business relations. However, it has a negative impact on the structural dimension of the social capital, hindering knowledge transfer, value information and new ideas.

Keywords: social capital; industrial clusters; start-ups; inter-organisational networks; regression analysis

39 pages, April 19, 2004

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