Leveraging Who You Know by What You Know : Specialization and Returns to Relational Capital

This paper investigates the interaction effects of specialization and relational capital on performance. We distinguish between upstream and downstream relational capital, and theorize that higher levels of specialization will buffer against decreases in upstream relational capital, because of deeper domain expertise and stronger downstream relational capital. Conversely, higher levels of generalization permit greater gains from increases in upstream relational capital, due to leverage across a more diversified downstream portfolio of activities. We test and find support for these hypotheses in the context of the US lobbying industry. Our study contributes to the strategic human capital literature by isolating the specialization and relational capital dimensions embodied within individuals, and providing performance implications of the interactions