Entrepreneurial social capital and reciprocal dependence effects on strategy: an empirical study of CROs in China

Abstract

Entrepreneurs must solve the problems related to localisation of information and knowledge relevant to opportunities, uncertainty reduction and incentive misalignment. This is even more important when dealing with large firms, in situations of high uncertainty and large stakes. Using survey data on CROs in China, we found that for entrepreneurial technology firms dealing with powerful partners, the entrepreneur's social capital (relational capital, network ties and cognitive similarity) and his management of internal cohesiveness have a significant bearing on strategy, knowledge exchange and overall performance. The effects are moderated by the reciprocal dependence with the partners. These findings contribute to a better understanding of the entrepreneurial process in unusually uncertain, high–stakes situations.