Abstract
Incubator tenants usually lack established business relationships and legitimacy. Incubators, therefore, aim to aid tenants in forming meaningful relationships that will contribute to their development. The literature on incubator tenants, including their development, naturally focuses naturally on when they are in an incubator. Valuable insights have been made on how network-based incubation influences the performance of tenants. However, the relationship between networks and performance is ambiguous, and the choice of measure plays an important role. Gradation is a clear indicator of venture development in an incubator. Nonetheless, few studies have focused on the impact of tenants’ relationships on graduation. This study focuses on the impact of social capital on the graduation of incubator tenants. It explores how tenants’ relationships impact their graduation by investigating the collective and individual social capital of tenants. A structural equation model was employed to study the impact of social capital on graduation based on data from incubators in the Wuhan Donghu High-Tech Zone. This study’s contributions are as follows: first, it provides insights into the impact of bonding and bridging social capital on tenants’ graduation. Second, it sheds light on the different roles of the collective social capital of incubators and individual social capital of tenants and their contributions to tenants’ graduation. Third, it provides a description of the heterogeneous mechanisms of individual social capital of tenants and their association with graduation.
Highlights
The importance of start-up firms in business networks has been well studied
While valuable insights have been made on how network-based incubation influences the performance of tenants, the relationship between networks and performance is ambiguous, and the choice of measure plays an important role
As the impact of the relationship dimension of collective social capital on tenants’ successful graduation is not statistically significant in the full model, we further explore whether individual social capital has played a mediating role
Summary
The importance of start-up firms in business networks has been well studied (see Bøllingtoft, 2012; Aaboen et al, 2017). Many start-up firms use incubators to help form a network conducive to their business development. The relationships formed with the help of incubators include those with other tenants, incubator management, service providers, business coaches, and, to some extent, investors. Incubator tenants develop their own idiosyncratic network relationships (Shih & Aaboen, 2019) with universities, research institutions, and potential customers, suppliers, or other market actors. Overall, these relationships play a role in aiding these firms to become viable businesses. Few studies have focused on the impact of incubator tenants’ relationships on graduation. Several studies have examined the performance of former incubator tenants after graduation (e.g., Lasrado et al, 2016; Schwartz, 2013); evidence on the effectiveness of incubator tenants’ networks on their graduation remains scarce
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