How Does Social Capital Work in Regional Innovation Systems? The Moderating Role of Contract Design

Social capital theory is frequently cited by more and more studies in many social science fields. The primary objectives of this study are to better realize with the effect of social capital on the cooperative performance of regional innovation systems, and to explore an important moderating effect of the contract design, which can reinforce trust level between partners. This study focused on the SMEs in the central Taiwan, which covers a wide range of economic activities and comprises several industrial clusters, and surveyed by questionnaire. Using regression analysis, the empirical results indicated that: (1) there is a positive relationship between social capital and the cooperative performance of regional innovation systems; (2) the contracts facilitate corporate and trust among partners, then enhance the relationship between social capital and the performance of regional is enhanced as well. This research contributes to regional innovation field by disentangling the moderating role of contracts, which is also a good help to facilitate the flow of resources, knowledge transfer and organizational learning between members, thereby strengthen the competitiveness of the region.