Social Capital and Learning Advantages: A Problem of Absorptive Capacity

Theoretically, social capital allows entrepreneurial firms to capitalize on learning advantages of newness and gain access to knowledge as the foundation for improved performance. But this understates its complexity. We consider whether learning through social capital relationships has a direct effect on performance and whether absorptive capacity mediates and moderates this relationship. We find that network-based learning has no direct relationship with performance, but this is mediated in each instance by absorptive capacity and is moderated twice. Our findings challenge the learning advantages of newness thesis and reveal how absorptive capacity can enable business performance from a firm's network relationships.