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The Context of Social Capital: A Comparison of Rural and Urban Entrepreneurs in Uganda


  • The authors wish to thank Thomas Schott and Jesper Sorenson, participants of the Babson 2011 conference, for their valuable comments. We are also grateful to Eddy Szirmai for his support in the data collection. We also thank three anonymous reviewers.


Classical network theory states that social networks are a form of capital because they provide access to resources. In this article, we propose that network effects differ between collectivistic and individualistic contexts. In a collectivistic context, resource sharing will be “value based.” It is expected that members of a group support each other and share resources. In contrast, in an individualistic context, resource sharing will be more often based on reciprocity and trust. Hence, we hypothesized that networks will be more beneficial in individual contexts compared with collectivistic context. We found partial support for our hypotheses.