HOW SOCIAL CAPITAL HELPS SMALL ENTERPRISE?: IMPLICATIONS FOR REGIONAL ECONOMIC DEVELOPMENT

Abstract

Presenting findings from a sample survey carried among manufacturing small and medium sized enterprises in Kayseri Sub-Region (TR72 – Sivas, Kayseri and Yozgat), this study attempts to understand whether and how social capital has an impact on small firms’ performance. Besides, the study goes further to bring into question the effectiveness of different types of social capital, norms and networks and how social capital is created at local level. Social capital is measured at two different (potential and actual) levels. Results of our analysis point to the fact that measuring social capital at its “actual” level might be more useful than measuring it as a “potential”. Our findings suggest that firms perform better, if they enjoy higher levels of collective action and can reduce their transaction costs through social relations

Keywords

• Regional development, Social capital, trust, collective action, networks, SMEs, Sivas, Kayseri, Yozgat.

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