Knowledge and innovative entrepreneurship - social capital and individual capacities
A central development within the management literature has been the growth of nascent entrepreneur research analysing on--going venture start-up efforts and/or firms in gestation over time (Davidsson, 2006). New ventures have an important effect on economic development. They are credited for the transfer of innovations into the market (Schumpeter, 1934; Acs and Plummer; 2005) and creating regional employment (e.g. Fritsch and Mueller, 2004). Central questions in nascent entrepreneurship research concern the characteristics of the venture creation process and the factors affecting performance of these firms (for an overview see Davidsson, 2006). Among other factors considered in the literature, the social embeddedness of the entrepreneur has been found to play a pivotal role (Davidsson and Honig, 2003). Social capital enables entrepreneurs to access resources (Florin et al., 2003) or novel information (Uzzi, 1997) in order to create opportunities (Baker and Nelson, 2005). During the venture creation process, most firms suffer from substantial resource constraints (Shepherd et al., 2000) and use their personal networks as a means to access resources and information far below market price (Elfring and Hulsink, 2003). However, a sizeable gap exists in the burgeoning social capital literature on the subject of team start--ups. A most prominent finding is that team start--ups are more successful than solo start--ups (e.g. Lechler, 2001). One of the offered explanations is that entrepreneurs can combine their abilities and financial capital in a team, giving them an advantage above solo entrepreneurs (e.g. Gartner, 1985; Stam and Schutjens, 2006). Sometimes explicitly (e.g. Colombo and Grilli, 2005; Stam and Schutjens, 2006) but more often implicitly (e.g. Davidsson and Honig, 2003; van Gelderen et al., 2005), the same argument is applied to the usage of social capital, i.e. that the social capital from individual team members is combined to provide an advantage for teams over solo entrepreneurs. As yet, to our knowledge, no study has explicitly analysed whether, compared to solo entrepreneurs, more social capital is found within teams and whether this leads to their better performance. In this chapter, we approach these two questions and empirically explore the use of social capital of solo entrepreneurs and entrepreneurial teams during the venture creation process. In doing so, we refine the empirical concept of social capital in that we do not look at its mere existence but focus on its use in terms of concrete support (e.g. advice on the business plan, marketing, or research and development - R&D) for the entrepreneurs. We address two major research questions. The first concerns the differential use of social capital. Do solo entrepreneurs rely more often on social capital than new venture teams, or is it the other way around? How do both types of start--ups use social capital? More precisely, we investigate the relationship between social capital and other characteristics of the new venture and its founders (e.g. human capital). The second research question then turns to the effect of social capital on subsequent new venture performance. Appropriate hypotheses in this study are tested using a dataset of 456 start--ups in innovative industries in the German state of Thuringia. The reminder of this chapter is organized as follows. In Section 2, we review the theory and previous research on social capital in order to generate six testable hypotheses. In Section 3, we describe the dataset and the methods employed to measure the use of social capital. We then present (Section 4) the results of our analysis. The chapter concludes in Section 5, where we interpret and discuss the results and draw some conclusions.
|Date of creation:||2013|
|Publication status:||Published in Knowledge, Innovation and Internationalization, Essays in Honour of Cesare Imbriani (2013): pp. 59-90|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ronstadt, Robert, 1988. "The Corridor Principle," Journal of Business Venturing, Elsevier, vol. 3(1), pages 31-40.
- Chandler, Gaylen N. & Honig, Benson & Wiklund, Johan, 2005. "Antecedents, moderators, and performance consequences of membership change in new venture teams," Journal of Business Venturing, Elsevier, vol. 20(5), pages 705-725, September.
- Michael Fritsch, 2004.
"Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany,"
Journal of Evolutionary Economics,
Springer, vol. 14(5), pages 525-542, December.
- Michael Fritsch, 2004. "Entrepreneurship, Entry and Performance of New Businesses Compared in two Growth Regimes: East and West Germany," Papers on Entrepreneurship, Growth and Public Policy 2004-41, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- Fritsch, Michael, 2004. "Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany," Freiberg Working Papers 2004,09, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
- Michael Fritsch & Pamela Mueller, 2007. "The persistence of regional new business formation-activity over time – assessing the potential of policy promotion programs," Journal of Evolutionary Economics, Springer, vol. 17(3), pages 299-315, June.
- Fritsch, Michael & Mueller, Pamela, 2005. "The persistence of regional new business formation-activity over time: assessing the potential of policy promotion programs," Freiberg Working Papers 2005,01, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
- Michael Fritsch & Pamela Mueller, 2005. "The Persistence of Regional New Business Formation-Activity over Time Â– Assessing the Potential of Policy Promotion Programs," ERSA conference papers ersa05p706, European Regional Science Association.
- Michael Fritsch & Pamela Mueller, 2005. "The Persistence of Regional New Business Formation-Activity over Time - Assessing the Potential of Policy Promotion Programs," Papers on Entrepreneurship, Growth and Public Policy 2005-02, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- Davidsson, Per & Honig, Benson, 2003. "The role of social and human capital among nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(3), pages 301-331, May.
- Mikael Samuelsson & Per Davidsson, 2009. "Does venture opportunity variation matter? Investigating systematic process differences between innovative and imitative new ventures," Small Business Economics, Springer, vol. 33(2), pages 229-255, August.
- Zoltan Acs & Lawrence Plummer, 2005. "Penetrating the ``knowledge filter'' in regional economies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 39(3), pages 439-456, 09.
- Lawrence A. Plummer & Zoltan J. Acs, 2004. "Penetrating the "Knowledge Filter" in Regional Economies," Papers on Entrepreneurship, Growth and Public Policy 2004-38, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- Scott Shane & Daniel Cable, 2002. "Network Ties, Reputation, and the Financing of New Ventures," Management Science, INFORMS, vol. 48(3), pages 364-381, March.
- Lumpkin, G. T. & Dess, Gregory G., 2001. "Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle," Journal of Business Venturing, Elsevier, vol. 16(5), pages 429-451, September.
- Cooper, Arnold C. & Bruno, Albert V., 1977. "Success among high-technology firms," Business Horizons, Elsevier, vol. 20(2), pages 16-22, April.
- Shepherd, Dean A. & Douglas, Evan J. & Shanley, Mark, 2000. "New venture survival: Ignorance, external shocks, and risk reduction strategies," Journal of Business Venturing, Elsevier, vol. 15(5-6), pages 393-410.
- Chowdhury, Sanjib, 2005. "Demographic diversity for building an effective entrepreneurial team: is it important?," Journal of Business Venturing, Elsevier, vol. 20(6), pages 727-746, November.
- Elfring, Tom & Hulsink, Willem, 2003. "Networks in Entrepreneurship: The Case of High-Technology Firms," Small Business Economics, Springer, vol. 21(4), pages 409-422, December.
- Marco Vivarelli, 2004. "Are All the Potential Entrepreneurs So Good?," Small Business Economics, Springer, vol. 23(1), pages 41-49, 08.
- Benson Honig & Miri Lerner & Yoel Raban, 2006. "Social Capital and the Linkages of High-Tech Companies to the Military Defense System: Is there a Signaling Mechanism?," Small Business Economics, Springer, vol. 27(4), pages 419-437, December.
- Batjargal, Bat, 2007. "Internet entrepreneurship: Social capital, human capital, and performance of Internet ventures in China," Research Policy, Elsevier, vol. 36(5), pages 605-618, June.
- Colombo, Massimo G. & Grilli, Luca, 2005. "Founders' human capital and the growth of new technology-based firms: A competence-based view," Research Policy, Elsevier, vol. 34(6), pages 795-816, August.
- Michael Fritsch & Pamela Mueller, 2004. "Effects of New Business Formation on Regional Development over Time," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 961-975.
- Christian Lechner & Michael Dowling, 2003. "Firm networks: external relationships as sources for the growth and competitiveness of entrepreneurial firms," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 15(1), pages 1-26, January.
- Presutti, Manuela & Boari, Cristina & Fratocchi, Luciano, 2007. "Knowledge acquisition and the foreign development of high-tech start-ups: A social capital approach," International Business Review, Elsevier, vol. 16(1), pages 23-46, February.
- Cooper, Arnold C. & Gimeno-Gascon, F. Javier & Woo, Carolyn Y., 1994. "Initial human and financial capital as predictors of new venture performance," Journal of Business Venturing, Elsevier, vol. 9(5), pages 371-395, September.
- Shaker A. Zahra & Harry J. Sapienza & Per Davidsson, 2006. "Entrepreneurship and Dynamic Capabilities: A Review, Model and Research Agenda," Journal of Management Studies, Wiley Blackwell, vol. 43(4), pages 917-955, 06. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:52482. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.