Participating in firm networks, where independent business organizations cooperate, has become increasingly popular to enhance firms’ innovation, venturing, and strategic renewal. Interorganizational trust, relationship diversity, and knowledge transfer are considered some of the prominent cornerstones of well-functioning networks. Using longitudinal survey data covering a population of 41 firms operating in two SME networks, we examine cause-effect relationships between interorganizational trust, relationship diversity, and knowledge transfer and the networking firms’ corporate entrepreneurship (CE). We found a causal influence of knowledge transfer and relational diversity on CE. Our approach also identified self-enforcing spirals in networks around high CE firms. Firms displaying high CE may stimulate the creation of relationships such as those characterized by high knowledge transfer that, in turn, are relationship characteristics that stimulate CE among the firms.