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Social embedding as a solution to a control problem? Evidence from Vietnamese small business* - page 6 / 52





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particular political regimes or policy programs. Because such relationships are built through

repeated interaction across a range of situations, they are unavoidably socially and spatially

“local” and tied to a community.

Accordingly, several large and seemingly unrelated literatures have documented the

relationship between social relationships and economic benefit. Streeck (1992), for example,

has theorized the possible impact of institutionally-rich social environments on high quality

manufacturing. Industrial districts in Italy, Germany, and the United States are held to be the

product of complex patterns of social relationships (Becattini 1992; Pyke 1992). Strong

societies may emerge to fill the voids left by weak states (Migdal 1988) and business

networks are thought to be a factor in Asian success (Hamilton 1991). Moreover, strong

social relationships may facilitate the emergence of new organizational forms (Powell 1990).

As empirical research accumulates, the findings often seem to be consistent with one

of several social capital arguments but the evidence remains less than convincing. Some

accounts may be categorized as self-satisfied post hoc constructions that lack explanatory

power upon closer examination. Research designs sometimes sample on the dependent

variable by investigating sites that are believed to be especially successful and rich in

relationships. Data are not always systematically collected. Empirical research almost

always observes a cross-section of an ongoing social system so that the direction of causality

must be argued, rather than demonstrated. The claims made on behalf of social capital are

sometimes mutually contradictory. Unsurprisingly, calls for greater conceptual clarity and

for more adequate empirical observation are not uncommon (Durlauf 2002; Markusen 2003).

This paper examines three distinct possible mechanisms by which social relationships

could be linked to economic transactions. All three of these arguments are consistent with an

observation of an overlap between economic exchange and social relationships but each


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