The importance of an actor’s network to his/her private benefits is well explored. Less well understood are the positive externalities of social capital, that is whether an actor’s social capital “spills-over” and improves the outcomes of those to whom s/he is connected, creating broader, not just private, benefits. This paper examines how investment bankers add value to one another in the course of everyday work. Our concern is with a banker’s second-order social capital. The main question is whether being connected to a broker matters to the ability of the focal actor to add value to those around him/her. We argue and find that connecting to brokers matters contingent upon the broker being more senior than the focal actor. The networks of contacts who are of higher rank and/or the focal actor’s leader positively contribute to the ability of the focal actor to add value. Second-order social capital does matter, contingent on the contacts: senior brokers.
network analysis, social capital theory, theoretical perspectives, leadership theories
Finance and Financial Management | Strategic Management Policy
Strategy and Organisation
Academy of Management Journal
Academy of Management
GALUNIC, Charles; ERTUG, Gokhan; and GARGIULO, Martin.
The Positive Externalities of Social Capital: Benefitting from Senior Brokers. (2012). Academy of Management Journal. 55, (5), 1213-1231. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/3161