IDEAS home Printed from https://ideas.repec.org/p/rug/rugwps/13-829.html
   My bibliography  Save this paper

Beyond environmental scarcity: Human and social capital as driving forces of bootstrapping activities

Author

Listed:
  • D. GRICHNICK
  • J. BRINCKMAN
  • L. SINGH
  • S. MANIGART

Abstract

Although entrepreneurship scholars highlight bootstrapping as an important resource acquisition approach to respond to the inherent resource constraints which nascent ventures face, little is known about what causes nascent ventures to engage in bootstrapping. Theory highlights the environment as an important determinant of bootstrapping activity. Analyzing bootstrapping behavior of 298 nascent ventures, we find that beyond environmental factors, individual characteristics of the nascent entrepreneurs and factors relating to the embeddedness of the entrepreneurs in the environment determine their venture’s bootstrapping behavior. In a more fine-grained analysis we gain insights how theses antecedents shape the use of particular bootstrap strategies. Findings contribute to our understanding of how early resource management approaches are developed in nascent ventures.

Suggested Citation

  • D. Grichnick & J. Brinckman & L. Singh & S. Manigart, 2013. "Beyond environmental scarcity: Human and social capital as driving forces of bootstrapping activities," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 13/829, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:13/829
    as

    Download full text from publisher

    File URL: http://wps-feb.ugent.be/Papers/wp_13_829.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gaylen N. Chandler & Steven H. Hanks, 1994. "Founder Competence, the Environment, and Venture Performance," Entrepreneurship Theory and Practice, , vol. 18(3), pages 77-89, April.
    2. Frédéric Delmar & Scott Shane, 2003. "Does business planning facilitate the development of new ventures?," Strategic Management Journal, Wiley Blackwell, vol. 24(12), pages 1165-1185, December.
    3. Carter, Nancy M. & Gartner, William B. & Shaver, Kelly G. & Gatewood, Elizabeth J., 2003. "The career reasons of nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(1), pages 13-39, January.
    4. Haynie, J. Michael & Shepherd, Dean & Mosakowski, Elaine & Earley, P. Christopher, 2010. "A situated metacognitive model of the entrepreneurial mindset," Journal of Business Venturing, Elsevier, vol. 25(2), pages 217-229, March.
    5. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    6. Wiklund, Johan & Baker, Ted & Shepherd, Dean, 2010. "The age-effect of financial indicators as buffers against the liability of newness," Journal of Business Venturing, Elsevier, vol. 25(4), pages 423-437, July.
    7. Kelley A. Packalen, 2007. "Complementing Capital: The Role of Status, Demographic Features, and Social Capital in Founding Teams’ Abilities to Obtain Resources," Entrepreneurship Theory and Practice, , vol. 31(6), pages 873-891, November.
    8. Westhead, Paul & Wright, Mike, 1998. "Novice, portfolio, and serial founders: are they different?," Journal of Business Venturing, Elsevier, vol. 13(3), pages 173-204, May.
    9. Jonathan D. Arthurs & Lowell W. Busenitz & Robert E. Hoskisson & Richard A. Johnson, 2009. "Firm–Specific Human Capital and Governance in IPO Firms: Addressing Agency and Resource Dependence Concerns," Entrepreneurship Theory and Practice, , vol. 33(4), pages 845-865, July.
    10. Yuri Mishina & Timothy G. Pollock & Joseph F. Porac, 2004. "Are more resources always better for growth? Resource stickiness in market and product expansion," Strategic Management Journal, Wiley Blackwell, vol. 25(12), pages 1179-1197, December.
    11. Ozgen, Eren & Baron, Robert A., 2007. "Social sources of information in opportunity recognition: Effects of mentors, industry networks, and professional forums," Journal of Business Venturing, Elsevier, vol. 22(2), pages 174-192, March.
    12. Hoang, Ha & Antoncic, Bostjan, 2003. "Network-based research in entrepreneurship: A critical review," Journal of Business Venturing, Elsevier, vol. 18(2), pages 165-187, March.
    13. Winborg, Joakim & Landstrom, Hans, 2001. "Financial bootstrapping in small businesses: Examining small business managers' resource acquisition behaviors," Journal of Business Venturing, Elsevier, vol. 16(3), pages 235-254, May.
    14. Ebben, Jay & Johnson, Alec, 2006. "Bootstrapping in small firms: An empirical analysis of change over time," Journal of Business Venturing, Elsevier, vol. 21(6), pages 851-865, November.
    15. Covin, Jeffrey G. & Slevin, Dennis P. & Heeley, Michael B., 2000. "Pioneers and followers: Competitive tactics, environment, and firm growth," Journal of Business Venturing, Elsevier, vol. 15(2), pages 175-210, March.
    16. Reynolds, Paul D. & Curtin, Richard T., 2008. "Business Creation in the United States: Panel Study of Entrepreneurial Dynamics II Initial Assessment," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 4(3), pages 155-307, January.
    17. Ronald K. Mitchell & J. Brock Smith & Eric A. Morse & Kristie W. Seawright & Ana Maria Peredo & Brian McKenzie, 2002. "Are Entrepreneurial Cognitions Universal? Assessing Entrepreneurial Cognitions across Cultures," Entrepreneurship Theory and Practice, , vol. 26(4), pages 9-32, July.
    18. Paul D. Reynolds & Nancy M. Carter & William B. Gartner & Patricia G. Greene, 2004. "The Prevalence of Nascent Entrepreneurs in the United States: Evidence from the Panel Study of Entrepreneurial Dynamics," Small Business Economics, Springer, vol. 23(4), pages 263-284, November.
    19. Lee, Lena & Wong, Poh Kam & Foo, Maw Der & Leung, Aegean, 2011. "Entrepreneurial intentions: The influence of organizational and individual factors," Journal of Business Venturing, Elsevier, vol. 26(1), pages 124-136, January.
    20. Ebbers, Joris J. & Wijnberg, Nachoem M., 2012. "Nascent ventures competing for start-up capital: Matching reputations and investors," Journal of Business Venturing, Elsevier, vol. 27(3), pages 372-384.
    21. Ronald K. Mitchell & Lowell W. Busenitz & Barbara Bird & Connie Marie Gaglio & Jeffery S. McMullen & Eric A. Morse & J. Brock Smith, 2007. "The Central Question in Entrepreneurial Cognition Research 2007," Entrepreneurship Theory and Practice, , vol. 31(1), pages 1-27, January.
    22. Ron Adner & Constance E. Helfat, 2003. "Corporate effects and dynamic managerial capabilities," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 1011-1025, October.
    23. David Smith, 2009. "Financial bootstrapping and social capital: how technology-based start-ups fund innovation," International Journal of Entrepreneurship and Innovation Management, Inderscience Enterprises Ltd, vol. 10(2), pages 199-209.
    24. Jeffrey G. Covin & Dennis P. Slevin, 1989. "Strategic management of small firms in hostile and benign environments," Strategic Management Journal, Wiley Blackwell, vol. 10(1), pages 75-87, January.
    25. David Audretsch & Dirk Dohse & Annekatrin Niebuhr, 2010. "Cultural diversity and entrepreneurship: a regional analysis for Germany," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(1), pages 55-85, August.
    26. Phillip Kim & Howard Aldrich & Lisa Keister, 2006. "Access (Not) Denied: The Impact of Financial, Human, and Cultural Capital on Entrepreneurial Entryin the United States," Small Business Economics, Springer, vol. 27(1), pages 5-22, August.
    27. David G. Sirmon & Michael A. Hitt, 2003. "Managing Resources: Linking Unique Resources, Management, and Wealth Creation in Family Firms," Entrepreneurship Theory and Practice, , vol. 27(4), pages 339-358, October.
    28. Dimo Dimov, 2010. "Nascent Entrepreneurs and Venture Emergence: Opportunity Confidence, Human Capital, and Early Planning," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 1123-1153, September.
    29. Hoegl, Martin & Gibbert, Michael & Mazursky, David, 2008. "Financial constraints in innovation projects: When is less more?," Research Policy, Elsevier, vol. 37(8), pages 1382-1391, September.
    30. Dennis Hanlon & Chad Saunders, 2007. "Marshaling Resources to Form Small New Ventures: Toward a More Holistic Understanding of Entrepreneurial Support," Entrepreneurship Theory and Practice, , vol. 31(4), pages 619-641, July.
    31. Nicholls-Nixon, Charlene L. & Cooper, Arnold C. & Woo, Carolyn Y., 2000. "Strategic experimentation: Understanding change and performance in new ventures," Journal of Business Venturing, Elsevier, vol. 15(5-6), pages 493-521.
    32. Jan Brinckmann & Soeren Salomo & Hans Georg Gemuenden, 2011. "Financial Management Competence of Founding Teams and Growth of New Technology–Based Firms," Entrepreneurship Theory and Practice, , vol. 35(2), pages 217-243, March.
    33. 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.
    34. Frédéric Delmar & Scott Shane, 2006. "Does Experience Matter? The Effect of Founding Team Experience on the Survival and Sales of Newly Founded Ventures," Post-Print hal-02311638, HAL.
    35. Wiklund, Johan & Shepherd, Dean, 2005. "Entrepreneurial orientation and small business performance: a configurational approach," Journal of Business Venturing, Elsevier, vol. 20(1), pages 71-91, January.
    36. Tim R. Holcomb & R. Michael Holmes Jr. & Brian L. Connelly, 2009. "Making the most of what you have: managerial ability as a source of resource value creation," Strategic Management Journal, Wiley Blackwell, vol. 30(5), pages 457-485, May.
    37. Oswald Jones & Dilani Jayawarna, 2010. "Resourcing new businesses: social networks, bootstrapping and firm performance," Venture Capital, Taylor & Francis Journals, vol. 12(2), pages 127-152, January.
    38. Gaylen N. Chandler & Douglas W. Lyon, 2001. "Issues of Research Design and Construct Measurement in Entrepreneurship Research: The past Decade," Entrepreneurship Theory and Practice, , vol. 25(4), pages 101-113, July.
    39. Tom Vanacker & Sophie Manigart & Miguel Meuleman & Luc Sels, 2011. "A longitudinal study on the relationship between financial bootstrapping and new venture growth," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 23(9-10), pages 681-705, December.
    40. 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.
    41. Gavin Cassar, 2010. "Are individuals entering self‐employment overly optimistic? an empirical test of plans and projections on nascent entrepreneur expectations," Strategic Management Journal, Wiley Blackwell, vol. 31(8), pages 822-840, August.
    42. 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.
    43. 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.
    44. Deniz Ucbasaran & Mike Wright & Paul Westhead, 2003. "A longitudinal study of habitual entrepreneurs: starters and acquirers," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 15(3), pages 207-228, July.
    45. Richard T. Harrison & Colin M. Mason & Paul Girling, 2004. "Financial bootstrapping and venture development in the software industry," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 16(4), pages 307-333, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Per Davidsson & Scott Gordon, 2012. "Panel studies of new venture creation: a methods-focused review and suggestions for future research," Small Business Economics, Springer, vol. 39(4), pages 853-876, November.
    2. Diana Hechavarría & Charles Matthews & Paul Reynolds, 2016. "Does start-up financing influence start-up speed? Evidence from the panel study of entrepreneurial dynamics," Small Business Economics, Springer, vol. 46(1), pages 137-167, January.
    3. Erik Lundmark & Anna Krzeminska & Dean A. Shepherd, 2019. "Images of Entrepreneurship: Exploring Root Metaphors and Expanding Upon Them," Entrepreneurship Theory and Practice, , vol. 43(1), pages 138-170, January.
    4. Mayer-Haug, Katrin & Read, Stuart & Brinckmann, Jan & Dew, Nicholas & Grichnik, Dietmar, 2013. "Entrepreneurial talent and venture performance: A meta-analytic investigation of SMEs," Research Policy, Elsevier, vol. 42(6), pages 1251-1273.
    5. Sullivan, Diane M. & Marvel, Matthew R. & Wolfe, Marcus T., 2021. "With a little help from my friends? How learning activities and network ties impact performance for high tech startups in incubators," Technovation, Elsevier, vol. 101(C).
    6. Mansi Singh & Sanjay Dhir & Harsh Mishra, 2023. "Analysing the Antecedents of Entrepreneurial Bootstrapping and Bricolage: A Modified Total Interpretive Structural Modelling and MICMAC Approach," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 32(1), pages 7-38, March.
    7. Abeer Alomani & Rui Baptista & Suma S. Athreye, 2022. "The interplay between human, social and cognitive resources of nascent entrepreneurs," Small Business Economics, Springer, vol. 59(4), pages 1301-1326, December.
    8. T. Vanacker & S. Manigart & M. Meuleman & L. Sels, 2011. "Bootstrapping as a Resource Dependence Management Strategy and its Association with Startup Growth," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/740, Ghent University, Faculty of Economics and Business Administration.
    9. Edelman, Linda F. & Manolova, Tatiana & Shirokova, Galina & Tsukanova, Tatyana, 2016. "The impact of family support on young entrepreneurs' start-up activities," Journal of Business Venturing, Elsevier, vol. 31(4), pages 428-448.
    10. Magdalena Markowska & Dietmar Grichnik & Jan Brinckmann & Diana Kapsa, 2019. "Strategic orientations of nascent entrepreneurs: antecedents of prediction and risk orientation," Small Business Economics, Springer, vol. 53(4), pages 859-878, December.
    11. Diana M. Hechavarría & Charles H. Matthews & Paul D. Reynolds, 2016. "Does start-up financing influence start-up speed? Evidence from the panel study of entrepreneurial dynamics," Small Business Economics, Springer, vol. 46(1), pages 137-167, January.
    12. Jan Brinckmann & Soeren Salomo & Hans Georg Gemuenden, 2011. "Financial Management Competence of Founding Teams and Growth of New Technology–Based Firms," Entrepreneurship Theory and Practice, , vol. 35(2), pages 217-243, March.
    13. Manolova, T. & Shirokova, G. & Tsukanova, T. & Edelman, L., 2014. "The impact of family support on young nascent entrepreneurs's start-up activities: A family embeddedness perspective," Working Papers 6381, Graduate School of Management, St. Petersburg State University.
    14. Johan Wiklund & Dean A. Shepherd, 2008. "Portfolio Entrepreneurship: Habitual and Novice Founders, New Entry, and Mode of Organizing," Entrepreneurship Theory and Practice, , vol. 32(4), pages 701-725, July.
    15. Fernández-Pérez, Virginia & Alonso-Galicia, Patricia Esther & Rodríquez-Ariza, Lázaro & Fuentes-Fuentes, María del Mar, 2015. "Professional and personal social networks: A bridge to entrepreneurship for academics?," European Management Journal, Elsevier, vol. 33(1), pages 37-47.
    16. Massimo Baù & Philipp Sieger & Kimberly A. Eddleston & Francesco Chirico, 2017. "Fail but Try Again? The Effects of Age, Gender, and Multiple–Owner Experience on Failed Entrepreneurs’ Reentry," Entrepreneurship Theory and Practice, , vol. 41(6), pages 909-941, November.
    17. Kim, Phillip H. & Longest, Kyle C., 2014. "You can't leave your work behind: Employment experience and founding collaborations," Journal of Business Venturing, Elsevier, vol. 29(6), pages 785-806.
    18. Salisu Isyaku, 2014. "Mediating Effect of Uncertainty Avoidance on the Relationship between Entrepreneurial Talent and SMEs Performance in Nigeria: A Conceptual Analysis," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(6), pages 368-383, June.
    19. Lichtenstein, Benyamin B. & Carter, Nancy M. & Dooley, Kevin J. & Gartner, William B., 2007. "Complexity dynamics of nascent entrepreneurship," Journal of Business Venturing, Elsevier, vol. 22(2), pages 236-261, March.
    20. Jiang, Xu & Liu, Heng & Fey, Carl & Jiang, Feifei, 2018. "Entrepreneurial orientation, network resource acquisition, and firm performance: A network approach," Journal of Business Research, Elsevier, vol. 87(C), pages 46-57.

    More about this item

    Keywords

    Bootstrapping; Human capital; Social capital; Environmental munificence; Nascent ventures;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H6 - Public Economics - - National Budget, Deficit, and Debt

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rug:rugwps:13/829. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nathalie Verhaeghe (email available below). General contact details of provider: https://edirc.repec.org/data/ferugbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.