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The Evolutionary Model of Entrepreneurial Firms' Dependence on Networks: Going beyond the start-up stage

Author

Listed:
  • Dan Li

    (Kelley School of Business, Indiana University)

  • Manuel Portugal Ferreira

    (ESTG, Instituto Politécnico de Leiria)

Abstract

In this paper, we propose a dynamic model of entrepreneurial firms’ dependence on networks. First we argue that five characteristics of entrepreneurial firms result in their high dependence on networks; these five characteristics include entrepreneurial orientation, central role of the entrepreneur, resource constraints, pursuit of flexibility, and niche market focus. We then examine how entrepreneurial firms’ growth is accompanied by the evolution of these five characteristics leading to a shift in the mode through which entrepreneurial firms construct and deploy their networks. In particular, we examine the composition and the stability of entrepreneurial firms’ networks. This paper contributes to building a more integrative theory of entrepreneurship.

Suggested Citation

  • Dan Li & Manuel Portugal Ferreira, 2006. "The Evolutionary Model of Entrepreneurial Firms' Dependence on Networks: Going beyond the start-up stage," Notas Económicas, Faculty of Economics, University of Coimbra, issue 24, pages 48-63, December.
  • Handle: RePEc:gmf:journl:y:2006:i:24:p:48-63
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    File URL: http://notas-economicas.fe.uc.pt/texts/ne024n0179.pdf
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    References listed on IDEAS

    as
    1. Jarillo, J. Carlos, 1989. "Entrepreneurship and growth: the strategic use of external resources," Journal of Business Venturing, Elsevier, vol. 4(2), pages 133-147, March.
    2. Venkataraman, S. & Van De Ven, Andrew H. & Buckeye, Jeanne & Hudson, Roger, 1990. "Starting up in a turbulent environment: A process model of failure among firms with high customer dependence," Journal of Business Venturing, Elsevier, vol. 5(5), pages 277-295, September.
    3. Deeds, David L. & Hill, Charles W. L., 1996. "Strategic alliances and the rate of new product development: An empirical study of entrepreneurial biotechnology firms," Journal of Business Venturing, Elsevier, vol. 11(1), pages 41-55, January.
    4. Lorenzoni, Gianni & Ornati, Oscar A., 1988. "Constellations of firms and new ventures," Journal of Business Venturing, Elsevier, vol. 3(1), pages 41-57.
    5. Aggarwal, Reena & Rivoli, Pietra, 1991. "Evaluating the costs of raising capital through an initial public offering," Journal of Business Venturing, Elsevier, vol. 6(5), pages 351-361, September.
    6. Lipparini, Andrea & Sobrero, Maurizio, 1994. "The glue and the pieces: Entrepreneurship and innovation in small-firm networks," Journal of Business Venturing, Elsevier, vol. 9(2), pages 125-140, March.
    7. Ostgaard, Tone A. & Birley, Sue, 1994. "Personal networks and firm competitive strategy--A strategic or coincidental match?," Journal of Business Venturing, Elsevier, vol. 9(4), pages 281-305, July.
    8. Jack, Sarah L. & Anderson, Alistair R., 2002. "The effects of embeddedness on the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 17(5), pages 467-487, September.
    9. Ramachandran, K. & Ramnarayan, S., 1993. "Entrepreneurial orientation and networking: Some Indian evidence," Journal of Business Venturing, Elsevier, vol. 8(6), pages 513-524, November.
    10. Birley, Sue, 1985. "The role of networks in the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 1(1), pages 107-117.
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    Citations

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    Cited by:

    1. Manuel Portugal Ferreira & Dan Li & Fernando A. Ribeiro Serra, 2008. "Firm Characteristics and Country Institutional Development: Business Relationships with Foreign Firms in Transition Economies," Working Papers 20, globADVANTAGE, Polytechnic Institute of Leiria.
    2. Sefiani, Yassine & Davies, Barry & Bown, Robin & Kite, Neilson, 2016. "The interface of networking and 'wasta' in an Arabic context," MPRA Paper 71889, University Library of Munich, Germany.
    3. Manuel Portugal Ferreira & João Carvalho Santos & Nuno Rosa Reis & Fernando A. Ribeiro Serra, 2010. "Entrepreneurship research: A bibliometric study of the EnANPADs 1997-2008," Working Papers 69, globADVANTAGE, Polytechnic Institute of Leiria.

    More about this item

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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