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A Note on Business Survival and Social Network

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  • Zhao, Chenlin
  • Burt, Ronald S.

Abstract

We extend Burt, Burzynska, and Opper's cross-sectional network prediction of relative success among Chinese entrepreneurs by predicting which ventures are still active five years later. The cross-sectional analysis is corroborated in three ways (despite the vicissitudes of a national anti-corruption campaign): (1) Businesses run in 2012 by CEOs with a network rich in structural holes are more likely to be active five years later, in 2017. (2) Survival odds are improved if the large, open network around a CEO in 2012 was initially a supportive ‘cocoon’ closed network when the business was founded. (3) Both results are contingent on capturing the guanxi ties valuable early in the history of the business. The two network effects disappear when the network around a CEO is limited to his or her currently valued contacts. Beyond corroboration, we find that advantage is concentrated in ventures that began well and had become successful. Network advantage here does not compensate for weakness – it is a mechanism for cumulative advantage, amplifying the success of businesses already doing well.

Suggested Citation

  • Zhao, Chenlin & Burt, Ronald S., 2018. "A Note on Business Survival and Social Network," Management and Organization Review, Cambridge University Press, vol. 14(2), pages 377-394, June.
    • Handle: RePEc:cup:maorev:v:14:y:2018:i:02:p:377-394_00
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    Citations

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    Cited by:

    1. Ronald S. Burt, 2019. "Network Disadvantaged Entrepreneurs: Density, Hierarchy, and Success in China and the West," Entrepreneurship Theory and Practice, , vol. 43(1), pages 19-50, January.
    2. Peter Ping Li & En Xie, 2019. "The unique research on the informal ties and social networks in East Asia: Diverse perspectives and new research agenda," Asia Pacific Journal of Management, Springer, vol. 36(2), pages 305-319, June.
    3. Laurence Saglietto & Cécile Cézanne & Delphine David, 2020. "Research On Structural Holes: An Assessment On Measurement Issues," Journal of Economic Surveys, Wiley Blackwell, vol. 34(3), pages 572-593, July.
    4. Mukhtar, Arshia & Zhu, Ying & Lee, You-il & Bambacas, Mary & Cavusgil, S. Tamer, 2022. "Challenges confronting the ‘One Belt One Road’ initiative: Social networks and cross-cultural adjustment in CPEC projects," International Business Review, Elsevier, vol. 31(1).
    5. Ronald S. Burt & Sonja Opper, 2020. "Political Connection and Disconnection: Still a Success Factor for Chinese Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 44(6), pages 1199-1228, November.
    6. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 2021. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 20(1), pages 32-77, February.
    7. Agnihotri, Arpita & Bhattacharya, Saurabh & Jafari-Sadeghi, Vahid, 2023. "Combatting global disruption through tertius iungens orientation of CEOs: A moderated-mediated mechanism," Journal of International Management, Elsevier, vol. 29(5).
    8. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 0. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 0, pages 1-46.
    9. Zou, Na & Storz, Cornelia, 2023. "Why do some entrepreneurs thrive? A network content perspective," Journal of Business Research, Elsevier, vol. 161(C).

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