Evolutionary Process of Social Capital Formation through Community Currency Organizations: The Japanese Case

Community currency systems are said to influence the revival of communities by promoting either local economic growth or social capital accumulation. However, no empirical studies have examined the multiple competing mechanisms for providing social support through transactional networks among participants. The current study connects network structural concepts to theories of social capital, transaction costs, homophily, and resource dependency at multiple levels and evaluates transactional relationships for community rebuilding and local economic development. We examine the evolutionary process of dynamic networks among local residents or organization members with network configurations in one of the largest Japanese community currency systems, "Peanuts." Using longitudinal network data over 12 years for approximately 1400 actors, we conclude that the evolution and achievement of transactional network dynamics and partner selections differ between the two groups of participants: individual members and organization members. We also provide practical implications for sustaining participants' transactions and commitment.