Skip to main content
Frontiers of Business Research in China
Download PDF

The impact structure of social capital on corporate performance: Empirical evidence from listed companies in China

Frontiers of Business Research in China volume 1, pages 135–154 (2007)Cite this article

Abstract

Vertical relationships with the government, particular relational capital and organizational social network capital, constitute corporate social capital (CSC). Using the empirical data of 97 listed companies in China, this paper examines the impact of CSC on corporate performance, finds that CSC has a positive impact on sales revenue but an insignificant impact on the improvement of ROA. More specifically, when a firm enlarges its sales revenue, the function of organizational network capital is stronger than that of a particular relational capital and that of governmental connections. The paper also finds that state-owned enterprises (SOEs) have more advantages in using governmental connections, therefore leading to better social status than non-SOEs do, who have fewer advantages in using any particular relational capital. The article suggests that managers should appraise carefully the effectiveness of CSC, and combine it with other resources; firms should distinguish the structure of the impact of CSC on performance improvement in a dynamic way. With respect to the implication of this paper, it could help in analyzing firm behaviors in the transitional China.

References

  • Adler P, Kwon S (2002). Social capital: Prospects for a new concept. Academy of Management Review, 27(1): 10–16

    Article  Google Scholar 

  • Baker W (2000). Achieving Success Through Social Capital: Tapping the Hidden Resources in Your Personal and Business Networks. San Francisco: Jossey-Bass Inc.

    Google Scholar 

  • Barney J B (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1): 99–120

    Article  Google Scholar 

  • Batjargal B, Liu M M (2004). Entrepreneurs’ access to private equity in China: The role of social capital. Organization Science, 15(4): 159–172

    Article  Google Scholar 

  • Bian Yanjie, Qiu Haixiong (2000). The Social Capital and Its Efficiency. Social Sciences in China, (2): 87–99 (in Chinese)

  • Bian Yanjie, Soon A (1997). Guanxi Networks and Job Mobility in China and Singapore. Social Forces, 75(3): 981–1006

    Article  Google Scholar 

  • Blyler M, Coff R (2003). Dynamic Capabilities, Social Capital, and Rent Appropriation: Ties that Split Pies. Strategic Management Journal, 2003, 24(7): 677–686

    Article  Google Scholar 

  • Burt R (1992). Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University Press

    Google Scholar 

  • Cheung S (1983). The Contractual nature of the firm. Journal of Law and Economics, 26(1): 1–21

    Article  Google Scholar 

  • Coase R (1937). The nature of the firm. Economia, 4(16): 368–405

    Google Scholar 

  • Cohen D, Prusak L (2001). In Good Company. How Social Capital Makes Organizations Work. Boston, MA: Harvard Business School Press

    Google Scholar 

  • Coleman J (1990). Foundations of Social Theory. Cambridge, MA: Harvard University Press

    Google Scholar 

  • De Geus A (1996). The Living Company. Cambridge, MA: Harvard University Press

    Google Scholar 

  • Fan G, Wang X (2005). The Marketization Index in China. Beijing: Economic Science Press

    Google Scholar 

  • Fudenberg D, Tirole J (1990). Game Theory. Cambridge MA: MIT Press

    Google Scholar 

  • Heertje A (1996). Introduction. In: Stiglitz J, eds. The Economic Role of the State. Beijing: China Goods Publishing House (in Chinese)

    Google Scholar 

  • Hüppi R, Seemann P (2001). Social Capital: Securing Competitive Advantage in the New Economy. London: Prentice-Hall

    Google Scholar 

  • Ikujiro N. (1991). The knowledge-creating company. Harvard Business Review, (11/12): 96–104

    Google Scholar 

  • Kotter J, Heskett J (1992). Corporate Culture and Performance. New York: The Free Press

    Google Scholar 

  • Jin Bei (2003). The Report on Chinese Business Competence (2003). Beijing: Social Science Literature Press (in Chinese)

    Google Scholar 

  • Kotter J, Heskett J (1992). Corporate Culture and Performance. New York: The Free Press

    Google Scholar 

  • Lin Nan (2001). Social Capital: A theory of Social Structure and Action. New York: Cambridge University Press

    Google Scholar 

  • Lin Yifu, Cai F, Li Z. The Chinese Miracle: Development Strategy and Economic Reform. Shanghai: Shanghai People’s Press (in Chinese)

  • Nahapiet J, Goshal S (1998). Social Capital, Intellectual Capital, and the Organizational Advantage. Academy of Management Review, 1998, 23(2): 242–266

    Article  Google Scholar 

  • Nelson R R, Winter S G (1982). An Evolutionary Theory of Economic Change. Cambridge, MA: Harvard University Press

    Google Scholar 

  • Peng M W, Luo Y (2000). Managerial ties and firm performance in a transition economy: The nature of a micro-macro link. Academy of Management Journal, 43(3): 486–501

    Article  Google Scholar 

  • Peng Y (2004). Kinship networks and entrepreneurs in China’s transitional economy. American Journal of Sociology, 109(5): 1045–1074

    Article  Google Scholar 

  • Podolny J M, Page K L (1998). Network forms of organization. Annual Review of Sociology, 24(1): 57–76.

    Article  Google Scholar 

  • Porter, M E (1980). Competitive Strategy. New York: The Free Press

    Google Scholar 

  • Porter, M E (1985). Competitive Advantage. New York: The Free Press

    Google Scholar 

  • Portes A (1998). Social capital: Its origins and applications in modern sociology. Annual Review of Sociology, 24(1): 1–24

    Article  Google Scholar 

  • Powell W W, Smith-Doerr L (1994). Networks and economic life. In: Smelser N J, Swedgerg R, eds. The Handbook of Economic Sociology. Princeton, NJ: Priceton University Press, 368–402

    Google Scholar 

  • Powell W W (1990). Neither market nor hierarchy: network forms of organization. In: Staw B M, Cummings L L, eds. Research of Organizational Behavior. Vol. 12. Greemwich CT: JAI Press, 295–336

    Google Scholar 

  • Prahalad, C K, Hamel, G (1990). The core competence of the corporation. Harvard Business Review, (5/6): 79–91

  • Putanam R (1993). Making Democracy Work: Civic Traditions in Modern Italy. Princeton, NJ: Princeton University Press

    Google Scholar 

  • Shi Junwei, Hu Lijun (2005). The voluntary supply of corporate social capital: A static game model. Journal of Quantitative & Technical Economics, (8): 9–16 (in Chinese)

  • Teece D, Pisano G, Shuen A (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7): 509–533

    Article  Google Scholar 

  • Tsui A, Farh J, Katherine X, Xiao Z (2006). Hierarchical ties and network closure as social capital for Chinese managers. Working paper, Arizona State University

  • Uzzi B (1997). Social structure and competition in interfirm network: the paradox of embeddedness. Administrative Science Quarterly, 42(1): 35–67

    Article  Google Scholar 

  • Wernerfelt B (1984). A resource based view of the firm. Strategic Management Journal, 5: 171–180

    Google Scholar 

  • Yang Y, Huang D, Li B (2001). Science of complexity and the management theory. Management World, (2): 167–174 (in Chinese)

  • Zhang W (1995). The Entrepreneur of a Firm: A Contractual Theory. Shanghai: Shanghai People’s Press (in Chinese)

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. School of Business Administration, Zhongnan University of Economics and Law, Wuhan, 430060, China

    Shi Junwei

  2. Center for Modern Industrial Economy, Zhongnan University of Economics and Law, Wuhan, 430060, China

    Fu Haiyan & Hu Lijun

Authors
  1. Shi Junwei
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Fu Haiyan
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Hu Lijun
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Shi Junwei.

Additional information

Translated from paper in International Symposium on Entrepreneur Research and Education, 2006, April (in Chinese)

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Shi, J., Fu, H. & Hu, L. The impact structure of social capital on corporate performance: Empirical evidence from listed companies in China. Front. Bus. Res. China 1, 135–154 (2007). https://doi.org/10.1007/s11782-007-0009-9

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11782-007-0009-9

Keywords

  • social capital
  • corporate performance
  • listed company
  • China