Abstract
Literature shows that social capital promotes diffusion in online user communities (OUCs). This research aims to show that social capital acts as a double-edged sword by promoting or suppressing in-group diffusion depending on the compatibility of the product with group identity (i.e., a topic or subject of common interest in the community). We analyze the diffusion of newly released music tracks across multiple communities on Last.fm, a world-leading music social network website. Across all three dimensions of social capital (cognitive, relational, and structural dimensions), we consistently find that the compatibility of the product with group identity moderates the relationship between social capital and in-group diffusion; social capital promotes in-group diffusion of songs that are compatible with group identity but suppresses in-group diffusion of songs that are incompatible with group identity. The findings contribute to the social capital and OUC literature and provide interesting implications for OUC managers.