INSTITUTIONAL POLYCENTRISM, ENTREPRENEURS’ SOCIAL NETWORKS, AND NEW VENTURE GROWTH

Bat Batjargal ()

No wp1060, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: What is the interrelationship among formal institutions, social networks, and new venture growth? Drawing on the theory of institutional polycentrism and social network theory, we examine this question using data on 637 entrepreneurs from four different countries. We find the confluence of weak and inefficient formal institutions to be associated with a larger number of structural holes in the entrepreneurial social networks. While the effect of this institutional order on the revenue growth of new ventures is negative, a network’s structural holes have a positive effect on the revenue growth. Furthermore, the positive effect of structural holes on the revenue growth is stronger in an environment with a more adverse institutional order (i.e., weaker and more inefficient institutions). The contributions and implications of these findings are discussed.

Keywords: Institutional polycentrism; networks; new venture growth; Institutions; Networks; Entrepreneurship; New ventures; and Emerging economies (search for similar items in EconPapers)
JEL-codes: B52 C12 D02 L26 M13 (search for similar items in EconPapers)
Pages: pages
Date: 2013-09-01
New Economics Papers: this item is included in nep-cse, nep-ent and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (106)

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