Lin,Nan - Network Theory of Social Capital

A Network Theory of Social Capital

Nan Lin Duke University [email protected]

January 2005

To appear in Handbook on Social Capital, edited by Dario Castiglione, Jan van Deth and Guglielmo Wolleb, Oxford University Press

Lin 1

The concept of social capital has captured the imagination and attention of a

wide range of scholars and professionals in diverse disciplines and practical arenas. Since

the notion of social capital has generated multiple definitions, conceptualizations and

empirical measurements, the continued diversity in such usages without integration may

undermine and ultimately bring its downfall as a rigorous scientific concept and theory

and approach in social analysis. The purpose of this chapter is to describe a network-

based theory of social capital and how we may resolve several critical issues: linking

social network features to social capital, studying both access and mobilization of social

capital, measuring social capital, linking micro- and macro-level analysis, and

differentiating homophilous and heterophilous social capital.

Definition and Theory

To gain a better understanding of social capital, it is necessary to place it in the

context of different theoretical types of capital (Lin, 2001b). Capital, first of all, is

both a concept and a theory.i As a concept, it represents investment in certain types of

resources of value in a given society. As a theory, it describes the process by which

capital is captured and reproduced for some sort of return. For example, in the classical

theory of capital, Marx defines capital as part of surplus value created in a production

process. He also describes it as a process in which those controlling the means of

production capture the surplus value, including capital, through their taking for

themselves the difference in values generated in the production market -- where labor is

paid the lowest possible wage -- and those generated in the trade and consumption

markets (Lin 2001 : Chapter 1) where the produced commodity is priced for higher value.

Neo-capitalist theories offer a similar definition of capital but different theories. The

human capital theory, for example, postulates that investment in certain human resources

(skills and knowledge) may also generate economic returns, even for laborers

participating in the production market. Likewise, social capital theory conceptualizes

production as a process by which surplus value is generated through investment in

social relations (Lin 2001: 2).

Social capital is defined as resources embedded in ones social networks,

resources that can be accessed or mobilized through ties in the networks (Lin 2001 :

Lin 2

Chapter 2). Through such social relations or through social networks in general, an actor

may borrow or capture other actors resources. These social resources can then generate

a return for the actor. The general premise that social capital is network-based is

acknowledged by all scholars who have contributed to the discussion (Bourdieu, 1980;

1983/1986; Burt, 1992; Coleman, 1988; 1990; Cook, forthcoming ; Erickson, 1995;

1996; Flap, 1994; 1991; 1994; Lin, 1982; Portes, 1998; Putnam, 1993; 1995a; 2000).

However, various conceptual and operational analyses then diverge from this

point of agreement. For some analysts, social networks, and certain features of the

networks (e.g., closure), are social capital. For others, especially those working at the

more macro-level (e.g., civic engagement), social capital assumes a metamorphosed ,

more generalized, form along the lines of voluntary associations, non-governmental

organizations (NGO), or generalized trust in others. The conceptual linkage between

network-based social capital and these macro-forms has never been made clear.

To resolve these confusions and potential conflicts, I propose staying close to the original

conceptual understanding of social capital, as defined by Coleman, Bourdieu, Lin, and

others. As already indicated, they have defined social capital as resources embedded in

social networks , or resources that can be accessed or mobilized through ties in the

networks (Lin 2001 : Chapter 2). A theory of social capital describes the process by

which such resources are captured through investment in social relations for returns on

that investment.

Social capital thus defined allows us to formulate theoretical propositions for

identifying the sources of social capital and the returns to social capital. Elsewhere (Lin

2001) I have identified three principal sources (exogenous variables) for social capital:

(1) structural positions (actors position in the hierarchical structure of social

stratification -- the strength-of-position proposition), (2) network locations -- (actors

location in the networks that exhibit certain features, such as closure or openness, or

bridging, as illustrated in the strength-of-tie propositions), and (3) purposes of action

(instrumental or expressive motivations) (Lin 2001: Chapter 5). Two types of returns

have also been identified: instrumental (wealth, power, and reputation) and expressive

(cohesion, solidarity, and well-being). Propositions, then, link these sources and types of

return on social capital in causal sequences. Further elaboration of sources and returns

Lin 3

becomes possible and feasible (Lin, forthcoming-a; e.g., see Cook, forthcoming for

conceptualizing trust as a contingent condition for social capital).

In the remainder of the paper, I will address several issues that are essential for

furthering research on a network-based theory of social capital: (1) how social capital can

and needs to be differentiated from social networks, (2) whether social capital refers

to the accessible pool of embedded resources or just to the embedded resources actually

mobilized for a particular action, (3) how social capital should be measured, (4) what

conceptual basis can be used to elevate the network-based social capital into collective

social capital, and (5) how to resolve the differential utility of homophilous versus

heterophilous social capital.

Social Networks and Social Capital

While social capital is contingent on social networks, they are not equivalent or

interchangeable terms. Networks provide the necessary condition for access to and use of

embedded resources. Without networks, it would be impossible to capture the embedded

resources. Yet networks and network features by themselves are not identical with

resources. Rather, variations in networks or network features may increase or decrease

the likelihood of having a certain quantity or quality of resources embedded. Thus,

network features should be seen as important and necessary antecedents exogenous to

social capital. For example, for a given network, density or closure of networks may

increase the sharing of resources among participants as individuals and/or as a group

(Bourdieu, 1980; 1983/1986; Coleman, 1990: Chapter 12). On the other hand, sparse or

open networks may facilitate access to better or more varied resources or information,

control or influence (Burt, 2001; Lin, 1999a).

Thus, equating dense or closed networks with better or greater amount of social

capital is conceptually flawed. What is needed is to specify conditions under which

network features such as density or openness lead to the capturing of certain resources

that generate certain kinds of returns. Elsewhere (Lin, 2000), I have argued that once

network features (closed or open) are treated as exogenous variables, modeling of the

social capital process may proceed to specify how features of networks (e.g., closed or

Lin 4

open), social capital (e.g., diversity of embedded resources), and returns (instrumental or

expressive) form a sequential set of variables for analysis.

Likewise, the notions of bridging and associated concepts (e.g., strength of ties

and structural holes) are network concepts that should be seen as sources rather than

constitutive elements of social capital. A bridge links two clusters or blocks of actors and

allows possible flow of information or control and influence through the gate-keeping

actors. However, whether and to what extent a bridge brings added value (i.e., capital) to

the gate-keeping actor or a block of actors depend on the resources embedded in the other

linking actor or block of actors (Lin 2001: 69 71). As a proposition, we may argue that

bridging, as a network feature, increases the likely availability of such added value

social capital -- but bridging by and of itself cannot and should not be considered as

social capital, as some bridges may not in fact bring capital to the gate-keeping actor or

the block utilizing such bridging.

Access and Mobilization

While the definition of resources embedded in social networks provides a

framework, any theory of social capital needs further specification about what kind and

amount of investing entails. Extent of investment in any type of resources for expected

returns, as suggested in the various theories on capital, may be estimated in two ways.

(1) Degree of access to such resources is the extent to which a potential pool of resources

capable of generating returns is available to the actor. It indicates the capacity of capital.

For example, for human or cultural capital, educational experience may reflect such

access. Amount and type of education represents an individuals build-up of potential or

capacity of resources, whether skills and knowledge, or behavioral and ideological guides

provided by particular norms and values. Increase in education, therefore, represents

increased human or cultural capital capacity. (2) Social capital also may be measured

directly by the actual capacity of resources embedded in social networks. An assessment

or inventory of resources in the social networks of an actor -- accessible or embedded

resources -- reflects such capacity.

A possible distinction between access and embeddedness is therefore in order

here. Some scholars, including this writer, at times have followed the convention of

Lin 5

using the term embedded resources to represent the capacity or pool of resources

embedded in the social networks, while at other times, they have used the term access

(Lin, 1999a) instead. Embeddedness applies more appropriately to the description of

the pool of resources in a social network, from a structural or gestalt perspective. An

inventory of all or representative resources in a complete network reflects or measures

the embedded resources. Access more appropriately applies to an actors conscious

cognitive map or knowledge of such embedded resources. A network may embed certain

resources not present in the cognitive map of an actor. Such resources therefore cannot be

determined by asking the actor, even though they are embedded in the actors overall

network. So if the analysis concerns all the pooled resources of a network as a whole

(e.g., in an organization), embeddedness may be appropriate (Granovetter, 1985)

whereas if the analysis concerns actors (whether individuals or collectivities ) awareness

of resources embedded in their ties or networks, access would be more appropriate.

On the other hand, actual use of the accessed resources in production or

consumption in the marketplace represents a selection of specific ties and resources from

the resource pool for a particular action at hand. For example, presenting a diploma,

curriculum vitae, or degree certificate in applying for a specific job opportunity indicates

mobilized human capital. The particular choice of document does not reflect the entire

applicants human resources pool; in fact, it may not even be the optimal choice from the

resource pool for the specific action at hand. Nevertheless, it makes use of a particular

aspect or portion of the human resource pool for a particular action. Likewise, the use of

specific social ties to help in a job search represents the mobilization of particular

resources in the social resources pool. They too may or may not be the optimal choices

for the action at hand. Nevertheless, they are a choice from among the pool of social

connections and their resources accessible to the actor.

Both access and mobilization of resources have appeared in all theories on capital.

While mobilization and use of resources may seem a more direct way to assess the effects

of capital, it is nevertheless only a partial representation of the capital pool and its

capacity. Unless the capital pool is also independently estimated, reliance on only a

particular mobilization and/or use of resources may underestimate the utility of available

capital. For example, social capital may not be adequately reflected in a particular use of

Lin 6

specific overt social ties to help in a job search, since other accessed resources and social

ties may be involved in latent or invisible ways in the marketplace. Access to rich and

diverse social network resources may in fact routinely facilitate unsolicited job

information from others, which may eventually become critical in getting a better job,

without the actor actually searching for that or indeed any job (Lin, 2003a). Relying

solely on data on specific job contacts in the job-search process will likely miss a

significant portion of the invisible hand of and returns to social capital. Again, the

invisible return to invested resources is not unique to social capital; human, cultural, and

other types of capital also operate in both visible and invisible ways. Therefore, in

research, access to and use of social capital should be both measured and closely

examined, if possible.

Measurement

Access to social capital has traditionally been measured with a name-generating

methodology. Typically, a question is posed, such as, Whom do you usually discuss

work problems with? and a sampled respondent is asked to provide a list of names of

those who provide such services or exchanges. Further questions about the

characteristics of the named (name interpreters), as well as relationships among them and

between the respondent and each of them, provide data for reconstructing the density of

the network, and for estimating the quantity and/or quality of social resources (e.g.,

socioeconomic statuses) of those named.

However, this name-generating methodology has several limitations. First, the

content universe from which a particular question (e.g., work discussion) is drawn is

usually undefined or unknown to the researcher. Sometimes multiple questions are posed

to capture multiple content areas (Fischer, 1977; Wellman, 1979). Since the universe is

unknown, it is difficult to argue that such questions representatively sample a particular

universe. Second, the number of names generated is limited, typically ranging from only

three to five. Therefore the reconstructed network is of limited range and scope. Some

studies have tried to overcome these limitations by leaving the list open-ended (Wellman,

1982). However, such an approach is costly, time-consuming, and impractical for coding

in larger-scale surveys. Finally, since the names that come to the respondents mind

Lin 7

usually are those with stronger relationships to the respondent, the resources in the

captured pool tend to be homogeneous and relations homophilous relative to the

respondent. As research has demonstrated and argued, weaker and bridging ties to other

parts of the social structure may nevertheless be critical (Burt, 1992; Granovetter, 1974;

Lin, 1982). Missing data on such potential links to other levels of a social hierarchy may

underestimate, for example, the utility of an individuals social capital for instrumental

purposes, such as social mobility.

An alternative methodology has recently appeared (Lin & Dumin, 1986; Lin, et

al., 2001a). The position-generating methodology systematically samples a list of

positions in a social hierarchy (e.g., ranked occupations in a society). By using

systematic sampling (e.g., equal intervals) or stratified sampling (e.g., occupations

prevalent for different genders, ethnic/racial groups, or classes, each sampled occupation

is presented to a respondent, who is asked to indicate whether she/he knows anyone in

that sampled position. Since the rank distance is known between every pair of sampled

positions and among all the sampled positions, the responses to the set of positions can

then be used to estimate, with known measurement errors, the potential pool of resources

(i.e., in the occupational hierarchy) accessible to each respondent. Indexes (e.g., the total

number of accessed positions, the range or difference between rank scores of the highest

and lowest accessed positions, etc.) can be constructed to represent social capital, that is,

the capacity or pool of resources embedded in the respondents networks. Since such

access is not contingent on the strength of ties (which can be assessed relative to each

accessed position), it largely (but not completely) overcomes the tendency to evoke

homogenous or homophilous ties present in the social networks. Research over the past

decade in North America, Europe, and Asia has demonstrated that the position generator

methodology is reliable (across samples and over time) and valid (across different

communities and societies with respect to certain types of returns, for example, social

mobility) (Angelusz & Tardos, 1991; Erickson, 1996; Hsung, 1992; Volker & Flap, 1999;

for a summary , see Lin, 1999b; and for a collection of studies around the world see Lin

and Erickson, forthcoming-b), . This methodology has proven to be flexible,

allowing for variety in types of hierarchical positions (e.g., relative to social, political,

Lin 8

cultural, or economic resources) for different societies, populations, or returns, and for

incorporating additional dimensions for analysis (e.g., gendered or ethnic social capital).

It should be noted that the name generator and the position generator

methodologies also differ on another set of conceptual grounds. Name generating is

intended to create a list of individuals in egos networks, resulting in a sample of

respondents social ties and nodes in their networks: It is a person-focused methodology.

Position generating, on the other hand, canvasses the extent of access to structural

positions in a hierarchy: It is a structure-focused methodology. The name generator is

useful for identifying significant others in egos personal networks; whether they occupy

similar or different hierarchical positions is of secondary significance and interest. On the

other hand, the position generator is useful for assessing vertical reaches in the hierarchal

structure to which ego has access through social ties. How many persons there are or

how strong the relationship is at each accessed position is of secondary analytical

importance. In either case, further probing may yield additional information. For

example, the name generator may also reveal information about each named persons

socioeconomic characteristics and thus their structural positions. The position generator

may also reveal whether each accessed position has multiple occupants whom ego knows

and how close their relationship is. Nevertheless, in the case of the name generator this

additional information does not recover missing information about the range of

respondents contacts with various structural positions, in the case of the name generator,

the thickness of contacts with the full range of positions in the structure is probably

under-represented. Thus they represent alternative strategies, suited for different

conceptual purposes. The name generator is suitable for probing the depth of close ties,

whereas the position generator facilitates studying breadth of access to various levels of a

hierarchy.

Mobilization of embedded resources for a particular action is a complementary

rather than substitute measurement of access to embedded resources, as it inevitably

focuses on a particular and limited number of ties and their resources used in a particular

action. Research typically employs a critical-episode or - incidence approach to identify

the use of social capital. For example, a large body of research examines whether

personal contacts are used in job searches and whether the resources the contacts possess

Lin 9

(e.g., socioeconomic characteristics) make a difference in the likelihood of success or the

level of attained statuses. It is clear from the literature that mere use of any personal

contacts provides no relative advantage in the labor market. However, contact resources

that represent mobilized social capital do make a difference. That is, among those who

use contacts in a job search, those who mobilize contacts with better resources (better

socioeconomic characteristics or statuses) tend to obtain better jobs. This confirms the

significance of mobilizing embedded resources in the labor market.

Questions have been raised as to whether the lack of evidence for the use of social

contacts in many job searches suggests that social capital may be of little significance.

As mentioned earlier, however, absence of identified help may not reflect the lack of

utility of social capital. Current arguments and research show that job information can

flow in networks, especially networks rich with embedded resources, without any parties

actively seeking jobs or job information (Lin, 1999b; 2003a). Such flow and utility of

information and contacts may reflect the informal workings of social capital, or its

invisible hand.ii Thus, measuring the actual utility of social capital for returns in a

marketplace (be it instrumental or expressive) requires assessment of access and both

visible and invisible use of resources embedded in networks.

The measurement of contact resources as mobilized social capital has also been

criticized (Mouw, 2003) on the grounds that much of the effect (i.e., any association

between the contacts occupational status and respondents post-contact attained

occupational status) is due to the homogeneity effect (similarity between the contacts

occupation and the respondents attained occupation), rather than the contacts superior

status positively affecting respondents superior attained status. However, the theory of

social capital principally hypothesizes that it is the benefit of mobilized embedded

resources (contacts status) relative to the initial status of the jobseeker that should make

a difference the strength-of -position hypothesis. That is, it predicts that the contacts

relatively superior positions, in comparison to the job-seekers initial positions, should be

evidence of the utility of social capital. Indeed, from the same data set Mouw used to

demonstrate his argument (the Detroit study), even when those cases that showed

similarity between respondents initial occupations with contacts occupations were

removed from the sample (to eliminate the homogeneous ties), the positive association of

Lin 10

respondents original statuses with contacts statuses retains its significance. This means

that seeking, obtaining, and successfully utilizing contacts superior resources are

positively associated with obtaining better statuses.

The attained status represents improved status resulting from the utility of a

superior contact, thus closing the status distance between contacts status and

respondents initial status. This is not only not surprising, but even expected, as many of

the respondents ought to be now at a similar or approximate status level as compared to

that of the contacts themselves the general homogeneity principle applies to occupants

at comparable or horizontal level of positions.

Consider, for example, Fernandezs study of telemarketers who made referrals for

new hires (Fernandez & Weinberg, 1997). All successful referrals brought in new

telemarketers, thus achieving complete homogeneity between contact (referrers) status

and the job-seekers (referreds) newly attained status. This would reduce the remaining

observations for Mauws demonstration to zero. It is the status gap between the original

positions of successful applicants and their referrers (i.e., most of the referred probably

initiated with lower statuses than the telemarketer referrers) that attests to the utility of

social capital.

Thus, in measuring mobilized social capital for specific actions, it is important to

measure the initial and attained positions or statuses for ego as well as the positions or

statuses of contacts in order to reflect completely the process by which social capital

returns added value.

Inferring from Micro- to Macro-Level Analysis

One important concern about a network theory of social capital is that it is built

on micro-data and meso-relations, which raises questions about whether and how it can

be translated into macro-level analysis. Unless this is resolved, macro-level analysis

conducted for voluntary organizations and other collectivities at the societal level will

remain segregated conceptually from the micro-meso-level analysis. In fact,

conceptualizing this potential linkage is an opportunity for further understanding of the

micro-to-macro linkage, deemed so important in conceptualizing overall micro-macro

social processes (Coleman 1990: 8; Lin 2001: 186).

Lin 11

As defined here, social capital is conceived as resources embedded in social

networks, with the understanding that at the micro-meso level the richness and diversity

of such resources for individual actors depends on two meso-conditions: (1) the extent to

which resources are embedded among ties directly accessible to ego, and (2) the extent to

which additional resources can be accessed through ties of ties. The first condition

specifies resources ego can gain through direct ties within egos networks, and the second

condition specifies resources to which ego can have access through indirect ties, that is,

through ties as bridges to other networks. The first condition specifies how capital is

captured within egos immediate social circle, and the second condition suggests how

capital may be captured beyond egos immediate social circle. Egos social capital,

therefore, is the resources embedded in the immediate social circle and by those

embedded in egos extended circles. For example, in the context of an instrumental

action such as the job - search process, it has been found that the help chain may involve

a single helper (one intermediary in the chain) or multiple helpers (two more

intermediaries in the chain) (Bian, 1997; Lin, 2003b). In the former, we see the

mobilization of a tie in egos immediate social circle, whereas in the latter, tie chains in

extended social circles.

Such conceptual and empirical clarification provides the necessary foundation for

understanding how social capital operates at the macro-level. We may assume that

voluntary associations constitute social circles (Simmel, 1950) that bring various

members with certain shared interests together for one or more purposes. The association

has its own collective capital, including properties, endowments, liquid assets, equipment,

human resources, etc. Likewise, it has social capital. The amount of social capital

available to each collectivity can be estimated by two characteristics: (1) the extent to

which resources that could be brought to bear on the associations projects by its

members may in fact be offered by them as resources for the collectivity, and (2) the

extent to which the association, through its officials and members other social ties and

participation in other social circles and associations may also be connected to the

resources of such other social circles, including other informal voluntary associations as

well as more formal organizations. The first characteristic refers to resources embedded

in the association itself provided by its members, whereas the second involves resources

Lin 12

accessible through its own or its members connections to other social circles. Then it

follows that an associations richness and diversity of embedded resources, representing

social capital, can be assessed in terms of (1) resources directly available from members

in the association, and/or (2) resources accessible through the associations its members

connections to other associations and individuals.

This macro-level conceptualization of social capital resolves several crucial

issues. First, it dispels the general misconception that any or all associations are equally

endowed with capital. In fact, just like individual actors, collectivities also vary in terms

of their store of capital, including social capital. Second, the effectiveness of an

association theoretically depends on the amount of social capital represented by the

resources accessible from its members and by the resources of other associations and

organizations to which it connects through members and officials. Third, this micro-

macro conceptualization offers operational tools for examining and analyzing access and

mobilization of social capital by associations as themselves social actors, just as it does

for individual actors. Empirical research on social capital, therefore, entail the analysis of

an association s composition and the number of members and resources they can bring to

bear, as well as analysis of the members and the associations connections to other

associations and organizations , their embedded resources , and their connections

through their chains of relationships.

Some recent research lends initial empirical support to this micro-macro

conceptualization. Paxton (2002) found that nations with more interconnected

associations tend to show a greater likelihood of being a participatory democracies. Son

and Lin (2004) show that greater organizational diversity , as reflected in their members

diverse gender, education, and race/ethnicity , is associated with more network assets and

voluntary actions of the individual members.

From conceptualizing social capital for collectivities such as associations, it takes

only an additional step to similarly characterize social capital for a larger social unit, such

as a community, collection of associations and organizations, or whole society.

Analytically for each unit, collectivities within it become component members, and their

resources become embedded resources for the larger unit. The units connections to

Lin 13

other units (e.g., other communities and/or societies) and those units resources also

constitute part of the units social capital.

As conceptual and empirical work is extended to larger macro-units, fine-tuning

the theoretical processes must keep pace as well. As in micro-level analysis, social

capital -- the embedded resources in ones social networks -- depends on a number of

factors, such as the actors position in the hierarchical structure, his/her location in the

networks, and institutional and personal contingencies ; the macro-level analysis also

requires specification of such factors as the location of a units position in the more

global hierarchy, its location in the networks of units, and institutional and other unit

characteristics for these other implicated units. Concepts such as bridges, strength of ties,

structural holes, size of networks, density or openness of networks, and institutional

expectations for social relations all become important exogenous variables in the

modeling of social capital at multiple levels. The nature and elements of these variables

need to be operationalized in various ways, each dictated by the particular empirical

systems under analysis. But the underlying conceptual and theoretical formulations

should remain consistent and credible.

Such macro-level analysis, furthermore, extends beyond voluntary associations

and civic engagement. Social capital analysis of economic and other formal

organizations needs to be similarly conceptualized, as well, for which social capital

capacity and mobilization should likewise be theorized. Performance of an economic

organization, for example, can be hypothesized as linked to the recruitment, deployment,

and work assignment of agents with social connections and network resources to

positions that demand social skills, such as those toward the top of the authority

hierarchy, or at the edge of the organization where positions require contacts and

exchanges with external units (e.g., marketing, advertising, and public relations), as well

as positions that interact with humans rather than materials (Lin, 2004). Its performance

should also be contingent on the organizations connections to other organizations and

units with rich and diverse resources.

Heterophilous versus Homophilous Social Capital

Lin 14

Yet another conceptual issue deserves our attention: the differential utility of

social capital, or different types of social capital for instrumental or expressive purposes.

Two types of social capital can be identified relative to embedded resources in networks:

heterophilous or homophilous. It is generally assumed or hypothesized that homophilous

social capital enhances expressive actions and heterophily in social capital helps

instrumental actions. For Coleman (1990), Putnam (2000) and others, social capital is

conceived as a network with high density or closure because it promotes trust and

reciprocity, which, in turn, enhance collective solidarity, or expressive returns. Since

density and reciprocity are highly associated with homophily in characteristics and

resources among the participants (Burt, 1987; Homans, 1950; Marsden, 1988; Lazarsfeld

& Merton, 1954), this conception postulates an association between homophilous social

capital and expressive purposes.

On the other hand, in studying social mobility, economic performance, or social

movement, Burt (2001b), Lin (1999a) and others have argued that sparse or open

networks allow access to novel or new information and resources through bridges (e.g.,

weaker ties, structural holes). Such added resources help achieve instrumental goals (e.g.,

better jobs, higher salaries and bonuses, or changing institutional distribution of

resources). Thus, diverse resources embedded in networks, or heterophilous social

capital, is seen as useful for instrumental purposes.

The differential utility, instrumental or expressive, of social capital specified for

different types of social capital should not be seen as differential conceptualization of

social capital for different levels (i.e., micro-meso versus macro-) of analysis. Both types

of utility are meaningful for both micro-meso and macro-level analyses (Lin, 1982; Lin,

2001b) Chapter 4). For example, Putnam (2000) acknowledged both bonding and

bridging functions for civil engagement or a macro-level analysis of social capital.

Coleman (e.g., merchants in Cairos markets, 2000) and Lin (e.g., social support provided

by strong ties, 1982; Lin, Dean and Ensel 1986) have conceived expressive functions of

social capital for small-scale networks or individual actors. More importantly, it is false

to assume, as sometimes implied in the literature, that it is an either-or choice a network

can be either heterophilous, therefore good for instrumental purposes, or homophilous,

good for expressive purposes. A better conceptual articulation is needed.

Lin 15

The initial discussion on homophily (Fischer, 1982; Homans, 1950; Laumann,

1966; Lin, 1982; Lazarsfeld & Merton, 1954; Wellman, 1979) characterizes social ties:

that actors share certain characteristics, including lifestyles. Particular shared

characteristics or lifestyles can be identified as the focal elements in a specific analytic

context. For example, gender, education and race/ethnicity tend to be central elements in

describing ties as friends that is, friendships tend to form between actors of similar

gender, education, or racial/ethnic backgrounds. However, these ties may or may not

share other characteristics (e.g., age, marital status, religion, or occupations). Further,

homophily is a dynamic variable. Interacting ties may increase similarity with one

another in other characteristics and lifestyles (e.g., preferences for food, music and

movies) over time. Nevertheless, at any moment, ties may be homophilous in some

characteristics and heterophilous in other characteristics. The degrees of homophily and

heterophily between ties may be independent variables: some ties are homophilous across

many characteristics while other ties are homophilous on some characteristics, but not on

others. Further, some degree of homophily must be present for any tie by definition,

while the degree of heterophily may fluctuate widely across ties. That is, variance in

homophily should be smaller across ties than that in heterophily.

Similarly, a network may be homophilous over some characteristics, such as

gender, education, and/or race/ethnicity. Yet heterophily is likely also to be present in

the network. The degrees of homophily or heterophily in a network again are

independent. A network can be homophilous over most characteristics, and not

heterophilous; while another network may be homophilous over some characteristics, and

heterophilous over other characteristics, at the same time.

This discussion makes it clear that a simple dichotomized assertion that a tie or

network contains homophilous (or bonding) or heterophilous (or bridging) social capital

is unlikely to yield fruitful results. Two clarifications can improve our understanding of

these two types of social capital. First, we need to assess separately the extent of

homophilous and heterophilous social capital, for both individuals, at the micro-meso-

level, and for collectives, at the macro-level. We cannot assume that a high degree of

homophily over some characteristics implies a low degree of heterophily across all

Lin 16

characteristics. Homophily and heterophily vary across characteristics for specific ties

and networks.

A second clarification is the relative utility of the two types of social capital. We

may argue that each type of social capital has its own merit in generating either

expressive or instrumental returns. However, if the above discussion regarding (1) the

essential homophily over some characteristics for all ties and networks, and (2) the

relative greater variance in heterophily than in homophily has validity, then, we can make

the following as a working hypothesis: relatively, heterophily is more significant than

homophily in characterizing social capital. In this scenario, the assumption is that a

certain degree of homophily is present to any tie or network, which by definition requires

a sufficient amount of interaction and shared sentiment. Homophily takes precedence

over heterophily in ordinary and normative form of social relations. Actions to maintain

resources usually take precedent over actions to acquire additional resources (Lin 2001:

Chapters 3, 4, 8, and 9) because maintenance and stability of relations through homophily

is more important for resource utility than the heterophilous risks in trying to acquire new

resources. Any network must be homophilous to a certain extent, if it is to maintain a

sufficient degree of connectivity for access to and sharing and exchange of resources.

The expectation is that a network must contain certain shared characteristics or lifestyles

among its members. Even in a generally heterophilous network, there must be enough

homophily for meaningful contacts.

The reverse, however, may not be true. In fact, the extent of heterophily varies

across networks and can be the key to understanding how various networks generate

different levels and types of returns to members as well as to the collectivity. If ties or

networks, while maintaining interactions and sharing certain characteristics and resources,

nevertheless also encompass characteristics and resources that are different among the

actors, be they individuals or collectives, access to diverse information and resources is

enhanced for all ties or members in the networks. This is so because different

characteristics and resources imply that the actors may also engage in other ties and

networks, different from the focal ones. That is, ties and members become bridges by

bringing such new or different information and resources, through their other ties and

Lin 17

networks, to be shared. Therefore, what gives a tie or network a significant advantage, or

added value, is the extent of its members heterophily in characteristics and resources.

In this theoretical formulation, the crucial analysis is to ascertain the extent to

which heterophily is present in a network. Indeed, the presence of heterophily suggests a

greater likelihood that some of the members, engaged with other networks, bring more

diverse resources to the focal network, resources beyond those already shared by

members in this network, thus enriching the potential pool of resources available to the

network. There is, of course, a possible cost associated with wider heterophily in a

network, as this may weaken shared sentiment, interest, and thus interaction, the

foundation of solidarity and cohesion. It is nevertheless conceivable that if the network

consists of members who have more diverse characteristics and yet is able to maintain

sufficient homophily to allow contacts and networking with each other, then such a

network ought to benefit from its members having such mixed characteristics, by being

able to become both expressive and instrumental, stable and flexible, cohesive yet

dynamic.

This formulation has significant implications for understanding the utility of

social capital. Instead of looking for networks that carry homophilous or heterophilous

social capital, researchers should explore the extent of heterophily in social capital

(diversity in embedded resources) in ties and networks and ascertain their instrumental as

well as expressive utilities. That is, networks with heterophilous social capital should be

expected serve well both instrumental and expressive functions for the collectivity and its

members.

If we apply this hypothesis to voluntary associations conceived of as networks,

for example, then a crucial analytic focus is to examine the degree of diversity among the

members in a given association. The hypothesis suggests that the greater the diversity of

lifestyles and other characteristics among the members, the more effective the association

will be as means for access to or mobilizing of social capital (embedded resources) for

both instrumental and expressive purposes of the collectivity and its members (barring

any failure of exchange due to differences in characteristics, as outlined above). Thus, all

associations are expected to be cohesive to an extent, while some of them gain more

benefits due to the diversity of its participating members.

Lin 18

Summary

This essay introduces a network-based theory of social capital. Conceived as

embedded resources in social networks, social capital is seen as contingent on network

features such as closure or openness, bridging, etc., but not identical to these features. It

can and should be measured for both its capacity (accessed resources) and actual uses for

particular actions (mobilized resources). Recent development in the position-generator

methodology facilitates a research program that can now be based on precise theoretical

and measurement requirements. Further conceptual clarification also makes possible the

translating the network-based theory and methods from a micro-meso basis to the macro-

contexts. The essay also postulates that it is the heterophily in social capital (diversity in

embedded resources) that may be the key feature in assessing the utility (both

instrumental and expressive) of social capital. These discussions, it is hoped, will set the

stage for further programmatic developments in social capital theory and research.

Notes: ------------------------------------------- 1 Applying both concept and theory to a term has been a common practice in the social

sciences as in the cases of classical Marxist theory, and of human and cultural capital, as

well as social capital theory.

2 For an economic formulation arguing for network effects, see

(Arrow & Borzekowski, 2004). In their formulation, the number of ties to different firms

-- an access indicator -- rather than particular mobilized ties is the estimator for network

resources.

Lin 19

REFERENCES CITED

Angelusz, Robert and Robert Tardos. 1991. "The Strength and Weakness of "Weak

Ties"." Pp. 7-23 in Values, Networks and Cultural Reproduction in Hungary,

edited by P. Somlai. Budapest: The Coordinating Council of Programs.

Arrow, Kenneth J. Arrow and Ron Borzekowski. 2004. "Limited Network Connections

and the Distribution of Wages," Finance and Economics Discussion Series, 2004-

41, Board of Governors of the Federal Reserve System (U.S.)., August.

Bian, Yanjie. 1997. "Bringing Strong Ties Back In: Indirect Connection, Bridges, and Job

Search in China." American Sociological Review 62(3, June):366-85.

Bourdieu, Pierre. 1980. "Le Capital Social: Notes Provisoires." Actes de la Recherche en

Sciences Sociales 3:2-3.

_____. 1983/1986. "The Forms of Capital." Pp. 241-58 in Handbook of Theory and

Research for the Sociology of Education, edited by J. G. Richardson. Westport,

CT.: Greenwood Press.

Burt, Ronald S. Burt, Ronald S. 1987. "A Note on Strangers, Friends, and Happiness."

Social Networks 6:311-32.

_____. 1992. Structural Holes: The Social Structure of Competition. Cambridge, MA:

Harvard University Press.

_____. 2001. "Structural Holes Versus Network Closure as Social Capital." In Social

Capital: Theory and Research, edited by N. Lin, K. Cook and R. S. Burt.

Hawthorn, NY: Aldine de Gruyter.

Coleman, James S. 1988. "Social Capital in the Creation of Human Capital." American

Journal of Sociology 94:S95-S121.

_____. 1990. Foundations of Social Theory. Cambridge, MA: Harvard University Press.

Cook, Karen S. Forthcoming. "Networks, Norms and Trust: The Social Psychology of

Social Capital." Social Psychology Quarterly.

Erickson, Bonnie H. 1995. "Networks, Success, and Class Structure: A Total View."

Presented at the Sunbelt Social Networks Conference, February, Charleston, S.C.

Lin 20

_____. 1996. "Culture, Class and Connections." American Journal of Sociology 102(1,

July):217-51.

Fernandez, Roberto M. and Nancy Weinberg. 1997. "Sifting and Sorting: Personal

Contacts and Hiring in a Retail Bank." American Sociological Review 62

(December):883-902.

Fischer, Claude S. 1977. Networks and Places. New York: Free Press.

_____. 1982. To Dwell Among Friends: Personal Networks in Town and City. Chicago:

University of Chicago Press.

Flap, Henk D. 1991. "Social Capital in the Reproduction of Inequality." Comparative

Sociology of Family, Health and Education 20:6179-202.

_____. 1994. "No Man Is An Island: The Research Program of a Social Capital Theory."

Presented at the World Congress of Sociology, July, Bielefeld, Germany.

Granovetter, Mark. 1974. Getting a Job. Cambridge, MA: Harvard University Press.

_____. 1985. "Economic Action and Social Structure: The Problem of Embeddedness."

American Journal of Sociology 91:481-510.

Homans, George C. 1950. The Human Group. NY: Harcourt, Brace.

Hsung, Ray-may, Hwang. 1992. "Social Resources and Petit Bourgeois." Chinese

Sociological Quarterly 16:107-38.

Laumann, Edward O. 1966. Prestige and Association in an Urban Community.

Indianapolis: Bobbs-Merrill.

Lazarsfeld, Paul F. and Robert K. Merton. 1954. "Friendship as Social Process: A

Substantive and Methodological Analysis." Pp. 298-348 in The Varied Sociology

of Paul F. Lazarsfeld, edited by P. L. Kendall. NY: Columbia University Press.

Lin, Nan. 1982. "Social Resources and Instrumental Action." Pp. 131-45 in Social

Structure and Network Analysis, edited by P. V. Marsden and N. Lin. Beverly

Hills, CA: Sage.

_____. 1995. "Les Ressources Sociales: Une Theorie Du Capital Social." Revue

Francaise de Sociologie XXXVI(4, October-December):685-704.

_____. 1999a. "Building a Network Theory of Social Capital." Connections 22(1):28-51.

_____. 1999b. "Social Networks and Status Attainment." Annual Review of Sociology

25:467-87.

Lin 21

_____. 2000. "Social Capital: Social Networks, Civic Engagement or Trust?"

Introductory Presentation. Presented at the Workshop on Social Capital, 19-

20/October. Trento, Italy: University of Trento.

_____. 2001b. Social Capital: A Theory of Structure and Action. London and New York:

Cambridge University Press.

_____. 2003a. "The Invisible Hand of Social Capital." Presented at the Creation and

Returns of Social Capital, 10/29. Amsterdam: Royal Netherlenads Academy of

Arts and Sciences.

_____. 2003b. "Job Search in Urban China: Gender, Network Chains, and Embedded

Resources." Pp. 145-71 in Creation and Return to Social Capital, edited by H.

Flap and B. Volker. NY: Praeger.

_____. 2004. "Social Capital and Organizations." Presented at the Inaugural Conference,

International Association for Chinese Management Research, June, Beijing.

_____. Forthcoming-a. "Social Capital." In Encyclopedia of Economic Sociology, edited

by J. Beckert and M. Zagiroski. London: Rutledge.

Lin, Nan and Mary Dumin. 1986. "Access to Occupations Through Social Ties." Social

Networks 8:365-85.

Lin, Nan and Bonnie Erickson , editors. Forthcoming-b. Social Capital: Advances in

Research. NY: Transaction-de-Gruytal.

Lin, Nan, Yang-chih Fu, and Ray-may Hsung. 2001a. "Position Generator: A

Measurement for Social Capital." Pp. 51-87 in Social Capital: Theory and

Research, edited by N. Lin, K. Cook and R. S. Burt. New York: Cambridge

University Press.

Marsden, Peter V. 1988. "Homogeneity in Confiding Networks." Social Networks 10:57-

76.

Mouw, Ted. 2003. "Social Capital and Finding a Job: Do Contacts Matter?" American

Sociological Review 68 (December):868-98.

Paxton, Pam. 2002. "Social Capital and Democracy." American Sociological Review 67

(April):254-77.

Portes, Alexandro. 1998. "Social Capital: Its Origins and Applications in Modern

Sociology." Annual Review of Sociology 22:1-24.

Lin 22

Putnam, Robert D. 1993. Making Democracy Work: Civic Traditions in Modern Italy.

Princeton, N. J.: Princeton University Press.

_____. 1995a. "Bowling Alone: American's Declining Social Capital." Journal of

Democracy 6(1, January):65-78.

_____. 2000. Bowling Alone: The Collapse and Revival of American Community. NY:

Simon & Schuster.

Simmel, Georg (trans. and edited by Kurt H. Wolff). 1950. The Sociology of Georg

Simmel. Glencoe, Ill.: Free Press.

Son, Joon-mo and Nan Lin. 2004. "Diversity of Civic Organizations and Voluntary

Actions of Individuals." Presented at the Annual Meeting, The American

Sociological Association, August, San Francisco.

Volker, Beate and Henk Flap. 1999. "Getting Ahead in the GDR: Social Capital and

Status Attainment Under Communism." Acta Sociologica 41(1, April):17-34.

Wellman, Barry. 1979. "The Community Question: The Intimate Networks of East

Yorkers." American Journal of Sociology 84:1201-31.

_____ 1982. "Studying Personal Communities." Pp. 61-80 in Social Structure and

Network Analysis, edited by P. V. Marsden and N. Lin. Beverly Hills: Sage.

i Applying both definition and theory to a term has been a common practice in social

sciences. It is also true in the cases of the classical Marxist theory, human capital,

cultural capital as well as social capital.

See a recent essay on how trust may be a contingent condition for social capital,

Cook, forthcoming. ii For an economic formulation in arguing for network effects, see (Arrow &

Borzekowski, 2004). In this formulation, number of ties to different firms, an

access indicator, rather than specific mobilized ties, is the estimator for network

resources.

Lin 23