Turning Public into Private: How Regional Social Capital Amplifies Entrepreneurs' Network of Innovation

Regional social capital is a collective asset and represents the level of social connection and interaction within a given community. Entrepreneurs’ social capital is an individual asset and represents the investment that entrepreneurs make in order to build their social networks. We focus on the relationship between regional social capital, entrepreneurs’ social capital, and firms’ innovation using a unique data set that combines public data with survey data. The results show that entrepreneurs’ social capital positively affects firms’ innovation and that regional social capital represents an external contingency that positively moderates the relationship between an entrepreneur’s social capital and innovation. Being located in an area characterized by a high degree of geographically bound social capital increases the effectiveness of entrepreneur’s social capital on firms’ innovation.