Bridging Human Capital and Social Capital Theories

Human and social capital have elicited notable attention of research scholars in various disciplines such as sociology, economics, finance, political science, behavioral science, human resource management, and organizational theory in their quest for answers to a broadening range of questions in their own fields. The primary reason for this attention is an increasing awareness of the fact that human resources and their interrelationships are crucial for the performance of any entity, be it a firm, nation, economy, or the global economy. In their search, scholars tried to gain an objective understanding of these concepts and compare these soft forms of capital to the traditional notion of capital as a factor of production in economics. In economics, capital is a purposive action, an investment of resources with expected returns in the market place. Economic capital is a resource that is processed twice. In the first process, resources are produced or altered as an investment and in the second process, the produced or altered resources are deployed in the market place to earn profit (Lin, 2002). Drawing from this definition of economic capital, human capital would be, in simple terms, an investment in individual knowledge and skills with expected returns in the market place. Similarly, social capital would be an investment in social relations with expected returns in the market place.