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Economic Institutions from Networks

Nee, Victor and Opper, Sonja LU (2015) In Re-Imagining Economic Sociology
Abstract
Economic institutions enabling trust and cooperation rest on multiplex networks and norms of reciprocity. A key feature of economic institutions is that they facilitate commercial transactions by reducing uncertainty and risk in markets. When trust and trustworthiness stem from confidence in community sanctions of norms, principal and agent relations are enforceable without resorting to legal rules and litigation. This chapter examines industrial clusters, a key economic institution enabling emergence of private manufacturing firms in China. In industrial clusters, manufacturing firms economize on transportation costs, and benefit from a large pool of specialized human capital and informational spillovers. Comprising a core group of small... (More)
Economic institutions enabling trust and cooperation rest on multiplex networks and norms of reciprocity. A key feature of economic institutions is that they facilitate commercial transactions by reducing uncertainty and risk in markets. When trust and trustworthiness stem from confidence in community sanctions of norms, principal and agent relations are enforceable without resorting to legal rules and litigation. This chapter examines industrial clusters, a key economic institution enabling emergence of private manufacturing firms in China. In industrial clusters, manufacturing firms economize on transportation costs, and benefit from a large pool of specialized human capital and informational spillovers. Comprising a core group of small and medium sized manufacturers linked to niche suppliers and distributors, a cluster location sustains dense multiplex networks that enable community sanctions. This enables collective action in solving problems of competitiveness and flexible adaption to changing market conditions. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Chapter in Book/Report/Conference proceeding
publication status
published
subject
keywords
China, entrepreneurs, industrial clusters, institutions, market exchange, networks, norms, reputation
in
Re-Imagining Economic Sociology
editor
Aspers, Patrik and Dodd, Nigel
publisher
Oxford University Press
ISBN
978-0-19-874976-9
DOI
10.1093/acprof:oso/9780198748465.001.0001
language
English
LU publication?
yes
id
596eec12-480a-41b6-a362-57af1ffd9b8b (old id 7866908)
date added to LUP
2015-09-16 11:30:43
date last changed
2016-05-10 11:15:02
@misc{596eec12-480a-41b6-a362-57af1ffd9b8b,
  abstract     = {Economic institutions enabling trust and cooperation rest on multiplex networks and norms of reciprocity. A key feature of economic institutions is that they facilitate commercial transactions by reducing uncertainty and risk in markets. When trust and trustworthiness stem from confidence in community sanctions of norms, principal and agent relations are enforceable without resorting to legal rules and litigation. This chapter examines industrial clusters, a key economic institution enabling emergence of private manufacturing firms in China. In industrial clusters, manufacturing firms economize on transportation costs, and benefit from a large pool of specialized human capital and informational spillovers. Comprising a core group of small and medium sized manufacturers linked to niche suppliers and distributors, a cluster location sustains dense multiplex networks that enable community sanctions. This enables collective action in solving problems of competitiveness and flexible adaption to changing market conditions.},
  author       = {Nee, Victor and Opper, Sonja},
  editor       = {Aspers, Patrik and Dodd, Nigel},
  isbn         = {978-0-19-874976-9},
  keyword      = {China,entrepreneurs, industrial clusters,institutions,market exchange,networks,norms, reputation},
  language     = {eng},
  publisher    = {ARRAY(0xabf0510)},
  series       = {Re-Imagining Economic Sociology},
  title        = {Economic Institutions from Networks},
  url          = {http://dx.doi.org/10.1093/acprof:oso/9780198748465.001.0001},
  year         = {2015},
}