This study seeks to explore the effects of interdepartmental conflict on bonding social capital within a department and bridging social capital between departments. Two-period data were collected from 213 respondents in 71 high-tech and manufacturing firms in Taiwan. These respondents work in research and development departments and cooperate with marketing departments. The results indicate that intergroup task and emotional conflicts promote bonding social capital within the research and development department. Up to a moderate level, task conflict subsequently promotes the development of structural and relational bridging social capital; however, an increase in task conflict above a moderate level becomes detrimental to structural and relational bridging social capital. Intergroup emotional conflict does not influence bridging social capital. Furthermore, intergroup conflict is unrelated to cognitive bridging social capital. The results provide insights into intergroup interactions, offering a novel means for managers to increase group social capital using the levels of conflict that naturally occur between departments.

We propose a novel mechanism giving rise to poverty traps and multiple equilibria in economic performance. It is a potentially important source of persistent underdevelopment across countries and regions. At the core of this mechanism, bridging social capital and social trust feed back on each other, interdependently affecting individuals' earnings and subjective well-being. High trust and abundant bridging social capital reinforce each other, leading to a “high” equilibrium where both these variables take persistently high values, and earnings and well-being are high as well, whereas low trust and lack of bridging social capital create a vicious circle, leading to a “low trust trap” where all these variables are persistently low. The workings of our theoretical model are in agreement with a wide range of findings from the contemporary literature in sociology and social psychology.