Journal of Economic Development
No. 205 , September 2011, Page 19-26

Impacts of Enterprise Leaders' Social Capital on Accessibility to Land Stock for Real Estate Development Projects

Real estate trading is an attractive business because of its profit margin; however, there exist barriers to entry in terms of access to land stock for project development. This research summarizes theories and builds a scale of enterprise leaders' perceived and practical social capital based on three aspects: networks of vertical and horizontal relationships, reliability, and conformity. The results show that senior leaders of government-invested enterprises with plenty of vertical relationships are more likely to succeed in securing a successful access to land stock needed for development projects. Meanwhile, non-public enterprises, especially foreign-invested ones, with young age and wide horizontal relationships are very active in accessing the land stock, but the likelihood of their successful project development is not guaranteed. Perceived social capital stimulates the development of horizontal relationships but not vertical relationships. Business leaders owning a large volume of assets can get more advantages in developing vertical relationships and gaining the permission to develop land lots for their projects. The research also indicates that mechanism for granting licenses is not fair and transparent enough and implies that it needs more improvements and reforms regarding its transparency and fairness. Additionally, leaders of state-owned enterprises should cooperate with their counterparts in private enterprises to improve accessibility to land stock, effectiveness in carrying out projects, and their own social capital.

Social Capital; Real Estate; Accessibility To Land Stock; Relationship Network.
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