Social capital and profits of small firms in the French construction industry

The profitability of small businesses in the French construction industry depends partly on their social capital. However, social capital yields advantages as well as constraints. How and under what conditions do social networks improve a company's profit margins? From a socio-technical perspective and strategic analysis, we defend the idea that return on social capital is conditioned by the nature of the tasks performed and by the interdependencies among firms. Comparing about 160 businesses from four various crafts, we show that loose networks profit relatively specialized businesses working independently on construction sites, while cohesive networks benefit those businesses that are most affected by socio-technical uncertainties.