The entrepreneur's network and firm performance

Victor Nee, Lisha Liu, Daniel DellaPosta

Research output: Contribution to journalArticle

6 Scopus citations

Abstract

Diverse organizational forms coexist in China's market economy, adapting and evolving in intensely competitive production markets. We examine the networks of founding chief executive officers of private manufacturing firms in seven cities of the Yangzi River Delta region in China. Through sequence analysis of ties that entrepreneurs relied on for help in the founding and critical events of their businesses, we identify three discrete forms of network governance: traditional kin-based, hybrid nonkin, and rational capitalist. We find that in traditional kin-based network governance, structural holes are linked to higher returns on assets and returns on equity. By contrast, in the rational capitalist form, structural holes and higher firm performance are not linked. We thus show that the content of the tie matters critically in the relationship between structural holes and firm performance.

Original languageEnglish (US)
Pages (from-to)552-579
Number of pages28
JournalSociological Science
Volume4
DOIs
StatePublished - Oct 18 2017

All Science Journal Classification (ASJC) codes

  • Social Sciences(all)

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