Network Closure or Structural Hole? The Conditioning Effects of Network-Level Social Capital on Innovation Performance

This study contributes to the bonding-bridging debate in the social capital literature by examining the conditioning effects of collective social capital. Data generated from simulation reveals that network density, a measure of network-level social capital, negatively moderates the impacts of firm-level social capitals, measured separately by degree centrality and structural hole, on a firm's innovation performance. Specifically, in low-density networks, degree centrality and structural holes are complementary at enhancing innovation performance. In high-density networks, the positive impact of degree centrality weakens and structural holes turn out to be detrimental. The findings not only advance our understanding of the cross-level dynamics of social capital, but also provide a possible explanation for the mixed empirical results found in previous studies.