The impact of human capital and social capital on entrepreneurship entry: the threshold of human capital-social capital coupling

Conceptual definition

Human capital

The concept of human capital is widely accepted as encompassing a person’s productive attributes, such as knowledge, abilities, skills, experience, and even health or age (Al-Awlaqi et al., 2023). These attributes are essential because they can generate returns for labor (Bashir & Siddique, 2023). Researchers often measure human capital using either a single index or a composite index, with years of education and work experience being the most common measures (Marvel et al., 2014).

In entrepreneurship research, human capital is generally divided into general human capital and specific human capital. General human capital is useful across a wide range of jobs and includes indicators such as education level, work experience, training, and self-efficacy. Specific human capital, on the other hand, is relevant to a particular venture or industry and includes indicators such as experience in business startups or management, industry-specific experience, and specialized skills and knowledge related to entrepreneurship (Markman & Baron, 2003; Ashourizadeh et al., 2014). In line with this, researchers often selected multiple indicators to measure human capital, as they thought this approach was more appropriate (Marvel et al., 2014).

Social capital

Social capital includes networks and the resources embedded within or derived from these networks, which are central to an individual’s social capital (Ferri et al., 2009). Nahapiet and Ghoshal (1998) defined social capital as having structural, relational, and cognitive dimensions. Lin (1999) distinguished between accessed and mobilized social capital, while other researchers categorized social capital into bonding–bridging or strong–weak ties (Iantosca et al., 2024; Chen & Li, 2024), as well as characteristics of the network (such as closure, transitivity, and density) and the agent (including position, identity, social demographics, and group memberships), or other connecting links (Urban & Moetse, 2024).

In the context of entrepreneurship, researchers have selected various dimensions to measure social capital. Salamzadeh et al. (2022) defined it in terms of bonding, bridging, and structural aspects, measuring it through the number of people and the frequency of interactions in entrepreneurial activities. Santarelli and Tran (2013) measured social capital based on network participation, network usefulness, network intensity, network size, and network support. In the context of Chinese collectivism and social hierarchy, social capital is often referred to as “guanxi,” which encompasses networks related to politics, family, and business communities (Su et al., 2022).

Human capital-social capital coupling

Coupling is a phenomenon in physics where two or more objects interact, and it has been used to analyze the interdependence between two or more systems in both economics and sociology (Zhan et al., 2023). When the levels of two systems are low and contribute almost equally, or when the levels are high and contribute significantly, the degree of coupling is likely high but varies in its nature. Therefore, coupling effects are often calculated using a coupling coordination model to distinguish between low levels of high coupling and high levels of coupling (Wang et al., 2024; Fang et al., 2023). When coupling coordination is high, the two elements within the system are both high and mutually reinforce each other, leading to a collective effect that exceeds the contribution of either element alone. As the collective effect of the two elements’ interaction decreases, coupling coordination also decreases, and the mutual constraint effect may increase (Lin & Chen, 2023).

In entrepreneurship research, human capital, social capital, institutions, and other factors are elements within the entrepreneurship ecosystem and should be considered as a cohesive system (Stam, Van de Ven, 2021). The systematic effect is not necessarily equal to the effect of one or some of the elements alone (Chen & Song, 2024), and the interdependence between elements should not be overlooked (Wurth et al., 2022). Researchers recommend using fuzzy-set qualitative comparative analysis and coupling coordination to estimate systematic effects (Wang et al., 2023; Tao et al., 2023). While fuzzy-set qualitative comparative analysis can identify which element dispositions are more beneficial for outcomes, it does not provide the magnitude of the combined effect. Coupling coordination analysis, however, can determine this magnitude.

Previous research has provided evidence of the interdependence between human and social capital. Empirical studies have shown that individuals with strong cognitive abilities (i.e., human capital) often have better interpersonal skills and can maximize the resources provided by their networks. Consequently, human capital and social capital can facilitate each other (Zhou & Liu, 2017). Key information and resources needed for entrepreneurial activities are often embedded within social capital networks (Black & Boal, 1994). However, the identification, capture, and utilization of this information and these resources are filtered through personal experience and knowledge (Bergmann et al., 2016). This filtering process guides individuals to invest in human capital, resulting in a reciprocal constraint between social capital and human capital.

Given the interdependence between human and social capital, this study defines the collective effect of human capital-social capital disposition as human capital-social capital coupling and uses the degree of coupling coordination to estimate it. If the degree of coupling coordination is high, it indicates a strong collective effect between human capital and social capital. Conversely, a low degree of coupling coordination signifies a weaker collective effect.

Research hypotheses

Human capital, social capital, and entrepreneurship entry

Education and cognitive abilities are two different forms of human capital that have positive impacts on entrepreneurship entry. Higher education is associated with broader and deeper personal knowledge and facilitates the generation of new knowledge based on existing knowledge (Bradley et al., 2012). This new knowledge provides entrepreneurial opportunities for individuals, and many academic entrepreneurship opportunities arise from scientific research (Bergmann et al., 2016). People with strong cognitive abilities are found to be better at gathering information, addressing interpersonal relationships, and solving complex problems (Grégoire et al., 2011).

Therefore, cognitive abilities are helpful in promoting entrepreneurship entry. A social network is a form of social capital that positively impacts entrepreneurship (Afandi et al., 2017). Having a larger social network refers to access to a greater number of resources (Adler & Kwon, 2002). Interacting with individuals of higher social status is associated with easier access to high-quality resources (Lin, 1999). Such resources are beneficial in promoting entrepreneurship entry.

Human capital-social capital coupling and entrepreneurship entry

The influence of resource combinations is assumed to be greater than the influence of individual resources alone (Han et al., 2017). For instance, when faced with resources that appear superficially identical, certain individuals possess the ability to recognize entrepreneurial opportunities within them, while others do not. This distinction may stem from differences in human capital (Adler & Kwon, 2002). Entrepreneurial opportunities do not necessarily translate into entrepreneurial activities; social capital is needed to support the completion of these activities (Greve & Salaff, 2003). Evidence shows that the interplay between human capital and social capital adds extra value to entrepreneurial activities (Rezaei et al., 2014). This interplay increases the total amount of resources available to entrepreneurs and can even lead to the development of new resources (Ciabuschi et al., 2012; Lu et al., 2022), thereby supporting individuals in starting businesses.

According to the concept of human capital-social capital coupling used in this study, when the coupling coordination between human capital and social capital is high, they mutually reinforce each other, resulting in a larger collective effect. This optimal utilization of both human capital and social capital increases the likelihood of starting a business. Therefore, human capital-social capital coupling is expected to positively influence an individual’s entrepreneurship entry. For example, the diverse thoughts and ideas generated from human capital can facilitate the use of social capital, while the potential of social capital can enhance the strength of human capital (Hollenbeck & Jamieson, 2015). High levels of both human capital and social capital generate a synergy effect, which is associated with positive outcomes. Thus, a high degree of coupling coordination between human and social capital is expected.

Further analysis is required to better understand the impact of human-social capital on entrepreneurial entry. According to the coupling effect of human capital- social capital disposition, it is anticipated that this coupling effect will be low when both human capital and social capital are lacking and high when they are abundant. In instances where both human and social capital is low, an increase in either is expected to enhance the coupling effect, potentially leading individuals to pursue entrepreneurship due to limited opportunities for traditional employment. Conversely, when both human and social capital are high, an increase in either is expected to further improve the coupling effect, as individuals stand to gain more from entrepreneurship.

Additionally, when the coupling of human and social capital is moderate, corresponding levels of human and social capital are expected to provide individuals with some job prospects that mitigate the risks associated with entrepreneurship. Alternatively, when one is high, and the other is low, individuals are likely to forego entrepreneurial ventures in favor of employment opportunities that leverage their strengths. Consequently, the relationship between human capital-social capital coupling and entrepreneurial entry is likely nonlinear as the coupling effect increases.

Gender and regional differences in human capital-social capital coupling

Gender has been found to affect individuals’ entrepreneurship entry through their entrepreneurial perceptions. Females are affected by gender stereotypes and the social division of labor, and other factors (Gupta et al., 2009). As such, female entrepreneurs have often been categorized as having fewer entrepreneurial resources, poorer entrepreneurial qualifications and abilities, more conservative management approaches, and inferior performance (Marlow & McAdam, 2013). Women’s self- evaluation of their entrepreneurship abilities has been found to be lower compared to men, resulting in low entrepreneurship self-efficacy and reducing women’s entrepreneurship entry (Aidis et al., 2007; Anna et al., 2000). The social norm associated with entrepreneurs is that they are predominantly male. Information asymmetry can exacerbate gender stereotypes (Murphy et al., 2007), which impacts the ability of female entrepreneurs to gain access to receive entrepreneurship resources and reduces women’s entrepreneurship entry.

Female entrepreneurs can attempt to overcome the negative gender effects on entrepreneurship by showing masculine traits, or by accumulating sufficient resources to improve their entrepreneurship competencies and to signal that competence to society (Busenitz et al., 2014). Compared with men, female entrepreneurs need a higher coupling effect of human capital-social capital to encourage entrepreneurship entry. Thus, it is expected to have a greater impact on women’s entrepreneurship entry.

Different entrepreneurial environments provide different resources for entrepreneurs (Cerqueiro & Penas, 2017). A more effective entrepreneurial environment is associated with lower resource constraints on entrepreneurs; this supports individuals’ entrepreneurship entry (Lim et al., 2010). In underdeveloped areas, markets are less advanced, government support for entrepreneurship is relatively inefficient, and entrepreneurs may face difficulties in obtaining outside resources. As such, they need to rely on their own social capital to overcome the institutional hole and develop social networks, and on their own experience, ability, and other sources of human capital to maintain their enterprises’ survival and development (Qian, 2018). Compared with entrepreneurs in economically developed areas, entrepreneurs in economically underdeveloped areas need a higher coupling effect of human capital-social capital disposition.

For this study, entrepreneurs were divided into four groups: women in the Eastern region, males in the Eastern region, women in the Midwest region, and men in the Midwest region. Female entrepreneurs require access to resources equivalent to their male counterparts and must also contend with the adverse impacts of gender bias stemming from societal divisions of labor. Compared with the Eastern region in China, the economic development level in the Midwest region is relatively low, the market is inefficient, the market atmosphere is not inclusive and open, and female entrepreneurs are generally more constrained by gender stereotypes. As such, the coupling effect of human capital-social capital for female entrepreneurs in the Midwest region needs to be higher, so it has a greater impact on female entrepreneurs in the Midwest region compared to men in the same area. Therefore, the coupling effect of human capital-social capital is expected to have the greatest impact on women’s entrepreneurship entry in the Midwest region and the smallest impact on men’s entrepreneurship entry in the Eastern region.

There is a gender difference with respect to entrepreneurship motivation, and men’s motivation is generally stronger than women’s (Davidsson & Honig, 2003; Li et al., 2023). Women in the Eastern region in China have greater advantages compared to men in the Midwest region, but may be less motivated to become entrepreneurs. They are expected to need a higher coupling effect of human capital-social capital to encourage them, so the coupling effect of human capital-social capital on women’s entrepreneurship entry in the Eastern region is expected to be greater for them compared to men in the Midwest region.

In conclusion, the following hypotheses and assumptions are presented, as shown in Fig. 1.

Relationship between human capital, social capital, and Entrepreneurship entry was obtained from the hypothesis.

Hypothesis 1: Human capital-social capital coupling plays a mediating role in how human capital and social capital influence entrepreneurship entry.

Hypothesis 2: The effect of human capital-social capital coupling on entrepreneurship entry is nonlinear.

Hypothesis 3: The effect of human capital-social capital coupling on entrepreneurship entry has gender and regional heterogeneity.