Classical network theory states that social networks are a form of capital because they provide access to resources. In this article, we propose that network effects differ between collectivistic and individualistic contexts. In a collectivistic context, resource sharing will be "value based." It is expected that members of a group support each other and share resources. In contrast, in an individualistic context, resource sharing will be more often based on reciprocity and trust. Hence, we hypothesized that networks will be more beneficial in individual contexts compared with collectivistic context. We found partial support for our hypotheses.

This paper examines the effects of the social context of economic exchange on the governance of transactions in buyer-supplier relations between firms. We distinguish three dimensions of social embeddedness of transactions, namely, repeated exchange between the partners (temporal embeddedness), relations with third parties such as other firms (network embeddedness) and social institutions that allow for credible agreements and commitments (institutional embeddedness). Together with transaction characteristics, social embeddedness shapes trust problems in economic exchange and how firms mitigate such trust problems through contractual planning. More precisely, we analyse how transaction characteristics and social embeddedness affect effort invested in contractual planning. We argue that social embeddedness provides alternatives for costly contractual planning, such as reciprocity and conditional co-operation. Forty purchase managers participated in a factorial survey. Virtual transactions were presented. Each transaction was represented by a vignette composed of eight characteristics, the levels of which were varied randomly. Three characteristics represented 'economic' features of transactions, namely, transaction-specific investments, monitoring problems and volume of the transaction. Five vignette characteristics represented social embeddedness: the history of previous transactions between the partners, expected future transactions, voice and exit networks and a rough indicator of institutional embeddedness. The purchase managers had to judge how much time negotiations would take, and also how many departments would be involved. Results show that social embeddedness leads a purchase manager to put less effort into the management of the transaction. While one-sided specific investments. monitoring problems and the volume of a transaction induce more negotiation efforts, such efforts decrease if transactions are embedded 'better' in a temporal or network sense, or if buyer and supplier can rely on more institutional embeddedness.

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This article considers determinants of innovative performance of entrepreneurs in developing countries. Innovation is viewed from a personal initiative perspective. We distinguish two mechanisms through which entrepreneurs who show personal initiative are innovative. The first mechanism is business planning. The second mechanism is the acquisition of resources that can be accessed through a social network of relations. We argue that the two mechanisms depend on the context of innovation. Planning will be more beneficial in more dynamic environments. In dynamic and individualistic-oriented environments it will be more beneficial to actively develop networks. In more static, collectivistic-oriented environments personal initiative will be less beneficial. The model was tested using a sizable survey of 283 rural and 290 urban entrepreneurs in Uganda, a country located in East Africa.

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