Social Capital in Multinational Corporations and a Micro-Macro Model of its Formation

Abstract

Linking theories of social capital with theories of multinational corporations (MNCs), we discuss the need for and creation of social capital in foreign subunits of MNCs. We argue that the required levels and forms of social capital are determined by the nature of interdependence between headquarters and subunits, and thus vary by different models of MNCs. We then develop a micro-macro model of social capital formation, explaining how boundary spanners form their private social capital and how this social capital is transformed into public social capital of the subunit.