Social Capital and the Resource-Based View of the Firm

This paper integrates the role of corporate social capital in the resource-based view of the firm. In the resource-based view, the firm is seen as a pool of resources, including vital intangible resources, which can create competitive advantage and superior profits. It is argued that social capital figures prominetly among such intangible resources. It is shown that an explicit inclusion of the role of social capital further strengthens the analytical powers of the resource-based view in relation to a number of issues. These issues include the relative merits of firms and markets as organizational forms, the ratinale of interfim networks as an alternative to spot market exchanges and coordination by a single centralized authority, and the role of social capital as a governance mechanism in such interfirm networks.

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