Performance Implications of a Retail Purchasing Network: The Role of Social Capital

This study employs social capital theory to examine how a retail buyer's network of industry peers influences retail performance. We propose that performance is enhanced by three network resources – access, referral, and influence – that result from two structural facets of a retail buyer's network: contact diversity and contact position. We test the model by collecting sociometric data that measures interpersonal ties among 84 retail buyers operating in the same geographic territory in the U.S. golf industry. The results offer evidence that network resources lead to higher levels of performance, even when accounting for differences in human capital and organizational resources. The paper concludes with a discussion of managerial and theoretical implications.