Social Capital

AAA

DEFINITION of 'Social Capital'

An economic idea that refers to the connections between individuals and entities that can be economically valuable. Social networks that include people who trust and assist each other can be a powerful asset. These relationships between individuals and firms can lead to a state in which each will think of the other when something needs to be done. Along with economic capital, social capital is a valuable mechanism in economic growth.

INVESTOPEDIA EXPLAINS 'Social Capital'

For example, if you know someone at a company where you are applying for a job and this connection helps you get the job at the company, you have used social capital. Social capital can also have negative effects. For example, if a social network is used for manipulative or destructive purposes that will affect the economy negatively, such as when a group colludes to fix market prices.

RELATED TERMS
  1. Capital

    1) Financial assets or the financial value of assets, such as ...
  2. Social Entrepreneur

    A person who pursues an innovative idea with the potential to ...
  3. Guanxi

    A Chinese term meaning "networks" or "connections," understood ...
  4. Uneconomic Growth

    When economic growth produces negative external consequences ...
  5. Ghosting

    An illegal practice whereby two or more market makers collectively ...
  6. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
Related Articles
  1. Can You Count On Goodwill?
    Personal Finance

    Can You Count On Goodwill?

  2. Human Capital: The Most Overlooked Asset ...
    Investing Basics

    Human Capital: The Most Overlooked Asset ...

  3. Evaluating A Company's Management
    Active Trading Fundamentals

    Evaluating A Company's Management

  4. Intangible Assets Provide Real Value ...
    Markets

    Intangible Assets Provide Real Value ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center