Social capital as a club good: the case of ethnic communities and entrepreneurship
Journal of Enterprising Communities: People and Places in the Global Economy
ISSN: 1750-6204
Article publication date: 3 April 2007
Abstract
Purpose
The purpose of this paper is to offer the economic theory of clubs as a potential unifying paradigm for the study of ethnic economies and social capital.
Design/methodology/approach
The paper examines the basic concepts of club theory, and reviews the empirical literature. It then applies club theory to the notion of social capital within the context of ethnic communities. It is argued that although various sociological frameworks of social capital and social networks have provided powerful descriptive models of ethnic and immigrant population behaviors, social capital needs to be examined from an economic perspective to increase prescriptive capabilities.
Findings
Using club theory the paper conceptualizes the benefits derived from an ethnic grouping – among which social capital can be considered the most important – as a “club” good, supplied at the co‐ethnic level and demanded by the various key stakeholders within an ethnic community. While these benefits are at least partially non‐rivalrous, they have clear characteristics of excludability and therefore form a “pseudo‐public” good. Four propositions are then offered regarding the behavior of ethnic entrepreneurs who draw from these important ethnic resources.
Originality/value
This paper offers a new way to examine social capital within ethnic communities. It also provides an economic foundation to begin analyzing optimal economic and social structures within these communities.
Keywords
Citation
Galbraith, C.S., Rodriguez, C.L. and Stiles, C.H. (2007), "Social capital as a club good: the case of ethnic communities and entrepreneurship", Journal of Enterprising Communities: People and Places in the Global Economy, Vol. 1 No. 1, pp. 38-53. https://doi.org/10.1108/17506200710736258
Publisher
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited