When is brokerage negatively associated with economic benefits? Ethnic diversity, competition, and common-pool resources

Abstract

There is a growing body of literature positively linking dimensions of social capital to economic benefits. Yet recent research also points to a potential “dark side” of social capital, where over-embeddedness in networks and the pressures associated with brokerage are hypothesized to constrain actors, having a negative effect on economic outcomes. This dichotomy suggests that context is important, yet the overwhelming majority of existing empirical evidence stems from socially homogenous populations in corporate and organizational settings, limiting a broader understanding of when and how context matters. We advance this discourse to a socially fragmented, ethnically diverse common-pool resource system where information is highly valuable and competition is fierce. Merging several unique datasets from Hawaii's pelagic tuna fishery, we find that network prominence, i.e., being well connected locally, has a significant, positive effect on economic productivity. In contrast, we find that brokerage, defined here as ties that bridge either structurally distinct or ethnically distinct groups, has a significant, negative effect. Taken together, our results provide empirical support to widespread claims of the value of information access in common-pool resource systems, yet suggest that in ethnically diverse, competitive environments, brokers may be penalized for sharing information across social divides. Our results thus contribute to an emerging theory on the fragile nature of brokerage that recognizes its potential perils and the importance of context.