A Matter of Location: The Role of Regional Social Capital in Overcoming the Liability of Newness in R&D Acquisition Activities

External knowledge acquisition represents a precondition for firms’ competitive advantage. However, young firms find it particularly difficult to gain access to external sources of knowledge: young firms suffer from a liability of newness by exhibiting significantly lower propensities to invest in external R&D than their older counterparts. We explore the role of geographically bound social capital in moderating this liability. By employing a Nested Logit approach, our findings show that geographically bound social capital moderates the liability of newness related to R&D acquisition, suggesting that the liability exists only in regions associated with low levels of social capital.