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Social embedding as a solution to a control problem? Evidence from Vietnamese small business* - page 35 / 52





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expectation of “no help” but the results suggest that receiving help from family is contingent

and an achievement in and of itself. Moreover, family help appears to be expensive help.

Compared to other sources of help, they require an extra measure of embedding. Family

members may be trustworthy, but we found little evidence that, beyond the spouse, they were


3) In contrast, business owners often appear to be working to strengthen families.

The strength of family relationships appears to be at least partially endogenous to the

economic relationships. Even family relationships are partially voluntaristic. Adult

household members are more likely to share in the social activities of the business if they

work there. Moreover, relatives and those recommended by others are more likely than other

employees to be socially embedded, suggesting that business is an instrument of coalition-

building to guard against contingencies as much as family is an asset to business. A business

provides a focus for family activities and thereby strengthens relationships.

4) Evidence was found for the search and pooling arguments but little for the

enforceable trust hypothesis. The need for monitoring does not appear to affect the level of

interaction among business partners (customers and suppliers of material and capital).

Family connection, proximity, and operational need each affect the frequency of interaction.

Having lent money did not. Personal recommendations and family ties do not reduce the

monitoring of employees. Such employees are more, not less, socially embedded than other

employees. The low correlation between embedding and the need for trust lead us to

conclude that, if embedding is a mechanism for inducing trust, it is not very effective. Some

commentators have perhaps fallen into the “over-socialized” trap that Granovetter sought to

avoid by assuming that a social relationship guaranteed performance. Social relationships

entail costs (Bourdieu 2001; Nee and Ingram 2001; Glaeser, Laibson, and Sacredote 2002)


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