Network Closure or Structural Hole? The Conditioning Effects of Network-Level Social Capital on Innovation Performance

Authors


  • This research was in part supported by grants from Social Science and Humanities Research Council of Canada, the National Natural Science Foundation of China (Grant No.71302097), and Guanghua-Cisco Global Leadership Institute. The research was initiated while the first author was the U.S. Fulbright Distinguished Professor in China. Support from the Fulbright Foundation, the U.S. State Department, and the U.S. Embassy in China are gratefully acknowledged. Comments and suggestions from ETP reviewers are gratefully acknowledged. We also thank Runhui Lin, John Lin, Kathleen Eisenhardt, and Yin Bai for valuable comments and assistance. Please send inquiries to Hongjuan Zhang at jenny_zhang12@163.com.

Abstract

This study contributes to the bonding–bridging debate in the social capital literature by examining the conditioning effects of collective social capital. Data generated from simulation reveals that network density, a measure of network-level social capital, negatively moderates the impacts of firm-level social capitals, measured separately by degree centrality and structural hole, on a firm's innovation performance. Specifically, in low-density networks, degree centrality and structural holes are complementary at enhancing innovation performance. In high-density networks, the positive impact of degree centrality weakens and structural holes turn out to be detrimental. The findings not only advance our understanding of the cross-level dynamics of social capital, but also provide a possible explanation for the mixed empirical results found in previous studies.

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