The impact of social capital on competitive advantage

Abstract

Purpose– The purpose of this paper is to empirically examine the influence of social capital on competitive advantage through collective learning and absorptive capacity.Design/methodology/approach– The study carries out analyses based on structural equation modeling to measure the main constructs and test the hypothesized relationships among the variables. The primary statistical technique for assessing survey data collected from 358 Taiwan tenants is partial least squares analysis.Findings– Collective learning and absorptive capacity fully mediate the relationship between social capital and competitive advantage. Moreover, social capital has a significant influence on both collective learning and absorptive capacity.Practical implications– Tenant firms in industrial parks must develop effective management tactics for the nurturing of inter-firm relations to enhance collective learning and their absorptive capacity to acquire and exploit key strategic resources such as tacit and explicit knowledge. For specialized firms, close social interactions in specific contexts, mediated by collective learning and absorptive capacity to make up for their resource constraints, can heighten their competitive advantage.Originality/value– By demonstrating the impact of social capital on competitive advantage in the specific context of industrial parks, whose artificial environment encourages and promotes close social interactions among tenants, this paper overcomes previous and contradictory findings regarding the relationship between social capital and competitive advantage. A key contingent factor is the mediating role of collective learning and absorptive capacity.