Entrepreneurship, Social Capital, and Institutions: Social and Commercial Entrepreneurship Across Nations
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...…check, we added a rule of law measure as a control variable from the World Bank’s Worldwide Governance Indicator database (2012; Kaufmann, Kraay, & Mastruzzi, 2011) to test whether or not our results would be better explained by this constitutional-level formal institution (Estrin et al., 2013a)....
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...Under such conditions, social needs such as poverty or environmental pollution are more abundant, triggering greater demand for SE (Dacin et al., 2010; Estrin et al., 2013a; Mair & Marti, 2009; Zahra et al., 2009)....
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...In a cross-national quantitative study, Estrin et al. (2013a) find that more government activism is negatively correlated with SE start-up efforts....
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...One exception is past entrepreneurship research that focused on how informal social relationships may substitute for the effects of weak rule of law (Estrin et al., 2013b; Puffer, McCarthy, & Boisot, 2010)....
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...In our proposed model (Figure 1), government activism is an important formal regulatory institution affecting demand for SE (Dacin et al., 2010; Estrin et al., 2013a)....
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"Entrepreneurship, Social Capital, a..." refers background in this paper
...Moreover, common indicators of nation-level social capital focus on cohesive networks and associations, which do not automatically generate positive externalities because the gains may come at the cost of excluding outsiders (Portes, 1998)....
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...However, enhancing cooperation within a smaller group can come at the cost of restricting individual freedom, the exclusion of outsiders, or even hostility toward them (Portes, 1998; Portes & Landolt, 2000)....
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...Because social capital at the national level is seen as “endowed,” rooted in stable cultural traits (Adler & Kwon, 2002; Westlund & Adam, 2010), it is usually viewed as irrelevant from a policy perspective (Fukuyama, 2001; Portes, 1998)....
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"Entrepreneurship, Social Capital, a..." refers background in this paper
...labeled as weak ties (Granovetter, 1973), bridging (Adler & Kwon, 2002), wide radius of trust (Fukuyama, 2001), or bonds of solidarity within a given community/nation (Portes & Landolt). With a growing “radius of trust,” more external effects are being internalized, strangers are no longer seen as outsiders, and societal norms of cooperation emerge (Fukuyama; Putnam, 2000; Stephan & Uhlaner, 2010; Westlund & Adam, 2010). The presence of far-reaching weak ties within a nation lowers transaction costs by facilitating access to new and more valuable information and other resources. It also enhances mobility and can mitigate social exclusion, enabling more individuals to access new opportunities and resources. Widespread weak-tie social capital within a nation can therefore support entrepreneurship (Kwon & Arenius, 2010; Stephan & Uhlaner, 2010). Because social capital at the national level is seen as “endowed,” rooted in stable cultural traits (Adler & Kwon, 2002; Westlund & Adam, 2010), it is usually viewed as irrelevant from a policy perspective (Fukuyama, 2001; Portes, 1998). However, social entrepreneurship, by supporting societal objectives and group needs, builds cooperation and goodwill and hence social entrepreneurs’ actions, and the enterprises they create enhance cooperative norms within a nation. Thus, social entrepreneurship offers a view on nation-level social capital which is constructible and growing through use. Social entrepreneurship can generate these positive spillover effects because it reflects bottom-up social self-organization that aims to benefit others. It provides positive signals about caring for others and examples of goodwill and cooperation. Moreover, the organizations that social entrepreneurs create are often built to overcome social exclusion and to enhance market participation by those in society who are underprivileged. Thus, they create new ties, often at the cost of breaking existing social barriers (Mair & Marti, 2009; Mair et al., 2012). Addressing social problems which are multifaceted, social entrepreneurs build collaborative relationships with a wide range of stakeholders thereby cutting across and bridging diverse groups (e.g., DiDomenico, Haugh, & Tracey, 2010; Peredo & Chrisman, 2006). It is this outreaching aspect, widening Fukuyama’s (2001) “radius of trust,” that may make social entrepreneurship a factor in building ties based on the nationwide community rather than local social segmentation....
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...labeled as weak ties (Granovetter, 1973), bridging (Adler & Kwon, 2002), wide radius of trust (Fukuyama, 2001), or bonds of solidarity within a given community/nation (Portes & Landolt). With a growing “radius of trust,” more external effects are being internalized, strangers are no longer seen as outsiders, and societal norms of cooperation emerge (Fukuyama; Putnam, 2000; Stephan & Uhlaner, 2010; Westlund & Adam, 2010). The presence of far-reaching weak ties within a nation lowers transaction costs by facilitating access to new and more valuable information and other resources. It also enhances mobility and can mitigate social exclusion, enabling more individuals to access new opportunities and resources. Widespread weak-tie social capital within a nation can therefore support entrepreneurship (Kwon & Arenius, 2010; Stephan & Uhlaner, 2010). Because social capital at the national level is seen as “endowed,” rooted in stable cultural traits (Adler & Kwon, 2002; Westlund & Adam, 2010), it is usually viewed as irrelevant from a policy perspective (Fukuyama, 2001; Portes, 1998). However, social entrepreneurship, by supporting societal objectives and group needs, builds cooperation and goodwill and hence social entrepreneurs’ actions, and the enterprises they create enhance cooperative norms within a nation. Thus, social entrepreneurship offers a view on nation-level social capital which is constructible and growing through use. Social entrepreneurship can generate these positive spillover effects because it reflects bottom-up social self-organization that aims to benefit others. It provides positive signals about caring for others and examples of goodwill and cooperation. Moreover, the organizations that social entrepreneurs create are often built to overcome social exclusion and to enhance market participation by those in society who are underprivileged. Thus, they create new ties, often at the cost of breaking existing social barriers (Mair & Marti, 2009; Mair et al., 2012). Addressing social problems which are multifaceted, social entrepreneurs build collaborative relationships with a wide range of stakeholders thereby cutting across and bridging diverse groups (e.g., DiDomenico, Haugh, & Tracey, 2010; Peredo & Chrisman, 2006). It is this outreaching aspect, widening Fukuyama’s (2001) “radius of trust,” that may make social entrepreneurship a factor in building ties based on the nationwide community rather than local social segmentation. Mair and Marti (2009) view social entrepreneurship as closely related to institutional entrepreneurship; an argument we extend by stressing that the informal institutions built by the “social bricoleurs” (Zahra et al., 2009) have a strong component of social capital, creating positive externalities. Through repeated examples of other-regarding exchanges that bridge diverse groups of stakeholders, social entrepreneurs enhance cooperative norms and construct social capital that can be appropriated by commercial entrepreneurs. Prior research on nation-level social capital has emphasized participation in voluntary associations, arguing that it increases the trust between participating members (e.g., Putnam, 1993). However, such organizations can become embedded in the social and political establishment and thereby adopt para-state-like characteristics that have little to do with building societal norms of cooperation (see, Olson, 1982). In contrast, an organization with social objectives, created from below, can generate cooperative norms that transcend its organizational boundaries. This resonates with research by Krishna (2007) who finds cooperative norms to be linked to self-initiated community-based organizations....
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...labeled as weak ties (Granovetter, 1973), bridging (Adler & Kwon, 2002), wide radius of trust (Fukuyama, 2001), or bonds of solidarity within a given community/nation (Portes & Landolt). With a growing “radius of trust,” more external effects are being internalized, strangers are no longer seen as outsiders, and societal norms of cooperation emerge (Fukuyama; Putnam, 2000; Stephan & Uhlaner, 2010; Westlund & Adam, 2010). The presence of far-reaching weak ties within a nation lowers transaction costs by facilitating access to new and more valuable information and other resources. It also enhances mobility and can mitigate social exclusion, enabling more individuals to access new opportunities and resources. Widespread weak-tie social capital within a nation can therefore support entrepreneurship (Kwon & Arenius, 2010; Stephan & Uhlaner, 2010). Because social capital at the national level is seen as “endowed,” rooted in stable cultural traits (Adler & Kwon, 2002; Westlund & Adam, 2010), it is usually viewed as irrelevant from a policy perspective (Fukuyama, 2001; Portes, 1998). However, social entrepreneurship, by supporting societal objectives and group needs, builds cooperation and goodwill and hence social entrepreneurs’ actions, and the enterprises they create enhance cooperative norms within a nation. Thus, social entrepreneurship offers a view on nation-level social capital which is constructible and growing through use. Social entrepreneurship can generate these positive spillover effects because it reflects bottom-up social self-organization that aims to benefit others. It provides positive signals about caring for others and examples of goodwill and cooperation. Moreover, the organizations that social entrepreneurs create are often built to overcome social exclusion and to enhance market participation by those in society who are underprivileged. Thus, they create new ties, often at the cost of breaking existing social barriers (Mair & Marti, 2009; Mair et al., 2012). Addressing social problems which are multifaceted, social entrepreneurs build collaborative relationships with a wide range of stakeholders thereby cutting across and bridging diverse groups (e.g., DiDomenico, Haugh, & Tracey, 2010; Peredo & Chrisman, 2006). It is this outreaching aspect, widening Fukuyama’s (2001) “radius of trust,” that may make social entrepreneurship a factor in building ties based on the nationwide community rather than local social segmentation. Mair and Marti (2009) view social entrepreneurship as closely related to institutional entrepreneurship; an argument we extend by stressing that the informal institutions built by the “social bricoleurs” (Zahra et al....
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..., Adler & Kwon, 2002; Westlund & Adam, 2010); we add to this by highlighting an emergent, bottom-up process of social capital creation. Moreover, common indicators of nation-level social capital focus on cohesive networks and associations, which do not automatically generate positive externalities because the gains may come at the cost of excluding outsiders (Portes, 1998). In contrast, we posit social entrepreneurship as a source of social capital with strong positive externalities. The actions of social entrepreneurs and the enterprises they create enhance cooperative norms within a nation, providing positive signals about caring for others through working to support societal objectives and group needs. Through their work, they build collaborative relationships with stakeholders, bridging diverse social groups and overcoming social exclusion by building new ties across social groups. By undertaking other-regarding exchanges, social entrepreneurs enhance cooperative norms and weak-tie social capital. This lowers transaction costs, making it easier for commercial entrepreneurs to access new information, resources, and opportunities. We therefore respond to Zahra and Wright’s (2011) call for further research on the linkages between social and commercial entrepreneurship, and propose the concept of social capital as an appropriate lens to apply to this relationship....
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