Social capital in cooperatives: A typology and influence on performance

Abstract

One of the distinctive characteristics of cooperatives is their social capital. This article contributes to the literature by proposing a classification of cooperatives according to their social capital: internal social networks (relationships between their members, and between their members and their managers) and/or external social networks (relationships with customers, other cooperatives, institutions etc.). The sample comprised managers from 50 agrifood cooperatives located in the Canary Islands (Spain) who answered a questionnaire designed on the basis of the existing literature. Descriptive statistics such as means and non-parametric test (Pearson's Chi-square test) were used to process the information. The largest group of cooperatives developed strong internal and external social networks (i.e., a broad social network). The second group was the opposite: social networks were weak internally as well as externally (the so-called narrow social network). The results also showed that when cooperatives developed only one type of network, they focused on a strong internal network (asymmetric internal social network). The only difference in the performance of cooperatives depending on their social network was observed in cooperatives with an asymmetric external social network. Such cooperatives had a better public image than their competitors.