1. ¹Department of Marketing, City University of Hong Kong, Hong Kong, PRC
2. ²Department of Marketing, Chinese University of Hong Kong, Hong Kong, PRC
3. ³School of Business & Administration, The Open University of Hong Kong, Hong Kong, PRC
4. ⁴Department of Management, City University of Hong Kong, Hong Kong, PRC

Correspondence: C-L Luk, Department of Marketing, City University of Hong Kong, Tat Chee Avenue, Kowloon Tong, Hong Kong, PRC. Tel: +852 2784 4430; Fax: +852 2788 9146; E-mail: mkclluk@cityu.edu.hk

Received 6 February 2006; Revised 1 August 2007; Accepted 4 September 2007; Published online 3 April 2008.

Abstract

This paper examines how social capital and organizational innovativeness influence business performance through their separate, indirect, or interactive effects, and how these effects differ across the institutional contexts of a transition economy and a market economy. In line with institutional theory, our findings show that the effects of social capital are more extensive and probably more malignant in a transition economy than in a market economy. Furthermore, different types of organizational innovativeness, as corporate culture, can be cultivated by different forms of social capital in different institutional contexts. The implications for institutional theory and social capital theory, and the managerial implications, are discussed.