The Study On The Relationship Between Private Enterprise Social Capital And Its Performance

With the deepen of reform and opening up,the private economy hasdeveloped rapidly. Statistics show that, as of the end of2007, the privateeconomy make65%of China’s GDP, non-public economy make75%of thethe contribution in the town’s share of employment,and its contribution is alsomore than non-private sectors’, has become the main channel for employment,has become an important source of state tax revenue and foreign trade of themain components. This shows that,the private economy has become animportant force in the promotion of social productive forces and theconstruction of socialist society,and will be play a greater role on prosperouseconomy, promoting innovation and spawned industries.Traditional view mainly explain the promotion of enterprises’ performanceon the factors’ increace.But it cannot explain why so many priate enterpriseshave almost the same factors but different performance. In fact, as aneconomic organization, the enterprise are also embedded in a specific set ofsocial relations network. These social capital in the networks relationships ofalso undoubtedly an important factor in the development of enterprises. Basedon this, a growing number of scholars from the perspective of social capital toexplain enterprises’ behavior, and trying to find internal mechanism betweencorporate social capital and business performance. Moreover, China is knownas "relationship-based" traditional society, it easier to do with the relationship,so the empirical research from China’s private enterprises provide the basis forour understanding of how social capital impact enterprises’ performance.This article first review the social capital theory, and on this basis definethe concept of enterprises social capital and ist research dimensions. Next,using a sample of went public on in the Shenzhen and Shanghai Stockbetween2001and2005,from the inside and outside dimensions of enterprisesocial capital, using internal social capital, political social capital, bank socialcapital and Inter-firm social capital to measure private enterprises, privateenterprises social capital,and empirically analyse the social capital and enterprises’ performance. We discovered that, enterprise internal social capitalhas a negative impact on enterprises’ performance, while three external socialcapital (political social capital, bank social capital and inter-firm social capital)improve enterprises’ performance. Finally, we introduce the interactive itemsbetween enterprises social capital and the degree of marketization, and foundthat: With the increase on the degree of the development of the labor market,enterprises internal social capital’s role has been strengthened; and withimprovement of the degree of legal protection, enterprise external socialcapital’s role has been declined.