Theorizing Social Capital in Entrepreneurship—An Empirical Study in the Pearl River Delta, China

Abstract

In this paper, a social capital framework is brought in to explore the dynamics of Chinese entrepreneurship with respect to the social and institutional conditions in the post-reform China. Based on data collected from field interviews, it analyzes how enterprise social capital impacts upon the Hong Kong affiliated manufacturing operations in the Pearl River Delta region. In regard to the “embeddedness-accessi- bility-use” framework, it is suggested that some trivial difference in the configuration of “guanxi (關係)” network could work specifically upon the divergent path of individual entrepreneurs during the early reform period of the Pearl River Delta. As China enters another stage of marketization, firms that have been over-embedded and poorly-positioned in the network are now forcing their way out of the region. Alternatively, recent institutional development across the border has boosted the significance of nurturing enterprise social capital in the formal coordinating channels. The renewal in the stock of enterprise social capital is crucial in reconfiguring the network dynamics and entrepreneurial action to influence the future trajectory of industrial development in the Pearl River Delta.