Boundaries of Network Ties in Entrepreneurship: How Large is too Large?
Vol. Volume 18, Number 4 December/2013
Shanshan Qian, Bruce H Kemelgor
External environments can require entrepreneurs to adjust and maintain network ties to cope with environmental changes and turbulence. Although network ties can help entrepreneurs to gain resources and support, researchers are becoming aware of some negative aspects of networks, such as information redundancy. We used relative weight analysis and identified that environmental munificence and uncertainty influence the size of one’s network. In addition, we surveyed 44 entrepreneurial founders of firms in the bio-technology industry regarding their network composition, including number of ties and firm performance. We found that environmental factors led to increases in both business and social network size. In addition, we identified an optimal number of network ties prior to tie-additions becoming negatively related to firm performance.
Network ties, firm performance, environmental munificence, environmental uncertainty