From individual social capital to collective social capital: empirical evidence from inter-firm financing trust network

Bao Wu

doi:10.1186/s40711-018-0088-3

Abstract

The paper proposes two theoretical hypotheses about how collective social capital is constructed based on the operation of individual social capital in Chinese context: the logic of particularist guanxi operations and the logic of social prestige recognition. The two hypotheses are tested by an empirical study about inter-firm networking for financing supports It is found that the former logic, which is strengthened by guanxi proximity including kinship proximity, geographic proximity, and industrial proximity, would make the focal firm restrain its trust relationship within a particular small group, leading the firm to become part of a sectarian small-group trust network; and the latter logic, which is strengthened by classification homogeneity, would encourage the focal firm to trust unspecified business partners, leading firms to become part of a large-scale open trust network. The trust radius of the focal firm has a mediating effect on the relationship between individual social capital and the collective-level structure of inter-firm financing trust network, thus exerting important influence on the construction of collective social capital.

Highlights

The individual approach and the collective approach are two long-standing rivals in social capital research
This paper aims to explore the theoretical pathway from individual social capital to collective social capital in the context of inter-firm networking for financing support
At the meso level, such financing trust network is, to some extent, a kind of structure of trust relationship, whose structural characteristics, such as scale and density, directly represent the intensity and form of social trust in the specific context of inter-firm networking for financing support

Summary

Introduction

The individual approach and the collective approach are two long-standing rivals in social capital research. They are in an ongoing contest for research focus, theory development, and concept crystallization. The inquiry about how collective social capital is constructed on the basis of the operation of individual social capital is at the core of this dialogue. This work is of theoretical significance because it can reveal and test the interactional mechanism of individual social capital and collective social capital. It is vital to discuss how collective social capital is developed on the basis of the operation of individual social capital in the context of Chinese society. Collective social capital, is still rare in Chinese society, manifested as a general lack of social trust (2018) 5:18

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Conclusion