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Why Networks Enhance the Progress of New Venture Creation: The Influence of Social Capital and Cognition

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  • Donna Marie De Carolis
  • Barrie E. Litzky
  • Kimberly A. Eddleston

Abstract

Why does social capital influence the progress of new venture creation for some entrepreneurs more than others? Our investigation suggests that social capital is not enough; that the type of person involved in network relationships matters to new venture creation. We test the effects of the interplay of social capital and cognition on a sample of 269 entrepreneurs. Our results confirm that social networks and relational capital enhance levels of illusion of control, which is directly related to the progress of new venture creation. We find marginal support for the relationship between social capital and risk propensity.

Suggested Citation

  • Donna Marie De Carolis & Barrie E. Litzky & Kimberly A. Eddleston, 2009. "Why Networks Enhance the Progress of New Venture Creation: The Influence of Social Capital and Cognition," Entrepreneurship Theory and Practice, , vol. 33(2), pages 527-545, March.
    • Handle: RePEc:sae:entthe:v:33:y:2009:i:2:p:527-545
    DOI: 10.1111/j.1540-6520.2009.00302.x
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