Purpose -This paper aims to develop and test a theoretical framework that examines the capacity of electronic open networks and closed interpersonal networks in building social capital and creating new knowledge. Specifically, this article aims to extend understanding in the field of knowledge management by examining how social networks can accumulate social capital and build up potential and absorptive capacity for the creation of new knowledge. Design/methodology/approach -The authors reviewed the literature on open electronic social networks and closed interpersonal networks, social capital and absorptive capacity to examine how different types of networks accumulate different dimensions of social capital and develop different measures of absorptive capacity. A model was developed that hypothesizes that open networks can impact the structural and cognitive dimension of social capital but have less than a moderate effect on the relational dimension. The model is tested in the academic community using a sample of 22 research faculties from ten different research institutions within the MIS departments and five from Marketing. Findings -The paper posits that electronic open networks have a significantly higher impact on the structural and cognitive dimension of social capital and a less than moderate impact on the relational dimension. Electronic open networks are, thus, best suited for acquiring and assimilating new knowledge, however the transformation and exploitation of knowledge require the cohesive ties of closed networks.Research limitations/implications -The combinative effect of electronic open networks and closed interpersonal networks is critical for the development of a potential and realized absorptive capacity and the creation of new knowledge. It is essential for researchers to examine the effect of different types of social networks on the process of knowledge creation and whether social capital accumulated in interpersonal networks can be leveraged in electronic open networks to enhance the process of knowledge creation. Practical implications -Businesses benefit from this line of research in knowing how well different types of social network are suited to the different phases of knowledge creation. Leveraging the capacity of open electronic networks and closed interpersonal networks can foster innovation. Originality/value -There is no existing literature that has examined the relationship between different types of social networks, social capital, absorptive capacity, and knowledge creation. This paper provides a foundation for future studies that examine the combinative effect of closed interpersonal and open electronic networks.