Title: Opening the black box of small-firm networks: governance mechanisms and their impact on social capital

Authors: Douglas Wegner; Kadígia Faccin; Pietro Cunha Dolci

Addresses: Unisinos University, Avenida Unisinos 950, Cristo Rei, São Leopoldo (RS), CEP 93022-000, Brazil ' Unisinos University, Avenida Unisinos 950, Cristo Rei, São Leopoldo (RS), CEP 93022-000, Brazil ' University of Santa Cruz do Sul, Avenida Independência 2293, Universitário, Santa Cruz do Sul (RS), CEP 96816-501, Brazil

Abstract: The literature on business cooperation and small-firm networks (SFNs) is silent regarding the effects of governance on relational variables such as entrepreneurs' social capital. Based on this assumption, we analysed how the governance mechanisms of SFNs influence the social capital of participant entrepreneurs. The research was based on a survey involving 212 firms from 49 different Brazilian SFNs. Results show that governance mechanisms of SFNs influence both the individual dimensions of the entrepreneurs' social capital (structural, relational and cognitive) and the aggregated variable. Centralisation of decision making is the main governance mechanism that negatively influences social capital. Our paper contributes to theory by showing how the design of governance mechanisms in SFNs affects social relations and the entrepreneurs' social capital. The study also provides network managers with practical insights on how to govern SFNs in order to make the cooperation effective and avoid negative effects on members' social capital.

Keywords: small-firm networks; SFNs; interorganisational networks; business cooperation; interorganisational relations; social capital; cooperation; business networks; entrepreneurship; small business; small-firms; governance mechanisms; structural social capital; relational social capital; cognitive social capital.

DOI: 10.1504/IJESB.2018.096174

International Journal of Entrepreneurship and Small Business, 2018 Vol.35 No.4, pp.559 - 578

Received: 01 Apr 2017
Accepted: 04 Apr 2017

Published online: 09 Nov 2018 *

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