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Two important, although neglected, dimensions of market exchange are the temporal and the social. Exchanges, particularly those between organizations, may be thought of as embedded in a social framework which rewards continuity. Similarly exchanges between the same entities which recur over time take on a different character from those which are instantaneous and atomistic. Such patterns of exchange create a framework, of among other things, expectations, trust, adaptations and investments which can be said to comprise the elements of a relationship. Addresses the many reasons why individuals, but especially organizations, choose to give up freedom of choice and the open market for the confines of a stable and long‐term relationship. Where such relationships exist they provide a measure of continuity in the workings of markets. This, in turn, gives rise to enduring structures which have been labelled industrial networks. Such structures provide an important framework for exchanges within a market since they introduce interdependence and stability into the system. Markets are thus networks of connected exchange relationships, among individuals and organizations, located in time and space, and whose identity is both the product and the outcome of these exchange patterns.

First, we develop a macro level explanation for how changes in social capital occur. Second, we apply a dynamic approach to social capital by examining on a more micro level the activities which are involved with and contribute to the increase or decrease in social capital in, largely dyadic, relationships within entrepreneurial networks. Third, we propose a more robust notion of social capital. We found that fi ve key relationshipdriving forces were involved in developing social capital. The research fi ndings suggested that entrepreneurs seem to have a strikingly similar modus operandi when it comes to creating and destroying their network social capital. Activities such as the reciprocal trading of favours, socializing, joint problem-solving, delivering to expectation and using transparent communications were crucial to both. Finally, we discovered that entrepreneurs managed their network relationships heuristically relying on social capital, particularly by leveraging the productive ambiguity of this crucial [net]work asset.