A Measure of Variations in Internal Social Capital among Family Firms

Abstract

Drawing on the social capital literature, this study develops a new measure to assess the internal social capital using a sample of family firms and its effect on economic and noneconomic performance. We collected data from two independent samples to explore the importance of family businesses’ internal social capital as assessed by a new instrument—the internal social capital among family business (ISC–FB). Results from confirmatory factor analyses, convergent and discriminant validity assessments, and predictive and incremental validity offered support for the ISC–FB's construct validity. Finally, we cross–validated the hypothesized factor structure with a second sample of family firms. Implications and future research using this measure are proposed.