As an important branch of western sociology, social network theory has become a hot area of research. From the angle of the combination of sociology and economics, this paper ascends the social network theory and social capital theory.Then it generally analyses the domestic research on this issue, and discusses the relationship between social networks and economic development. By summarizing the origin and development of social network, this thesis elaborates on the connotation of social network theory and its functions. This paper expatiate on the positive effect the social network produces on Wenzhou merchants and Wenzhou economy from four aspects, which includes providing resources, improving management performance, establishment of mutual trust between members and cutting the cost. Consequently. This helps to establish “Tri-Wenzhou” and leads to industry cluster and development. But we should realize the disadvantageous of social network.
From the thesis, conclusions are obtained as follows: In realizing the Sustainable Development of Wenzhou Economy , social network plays an important role in saving the transaction cost, promoting regional economic co-operation, accelerating the Industry Cluster and ensuring sound and rapid economic growth of regional economy.
