Institutional Logics of Funding Partners and New Venture Survival in an Emerging Market Context

Abstract

A new strand of research within the entrepreneurial approach to entrepreneurship shifts focus away from broad field-level institutional logics, and their effect on new venture performance, towards an analysis of the performance advantages of logics carried by organizational partners (Pahnke et al., 2015). Drawing on contingency theory, we build on this theoretical argument by demonstrating that the performance advantages of funding partner logics could vary across economic and social jolts in the new venture’s environment. The economic jolt under consideration in this study is inflows of FDI, and the social jolt under consideration in this study is inflows of refugees. We analyze the likelihood of venture failure within the first two years of operation across family, bank, and government funded ventures. We use a sample of 9565 businesses from Jordan founded between 2003 and 2013. Our findings indicate that bank and government funded new ventures tend to perform better overall, but family funded new ventures tend to perform better during economic jolts, and bank funded new ventures tend to perform better during social jolts. The implications of our findings are discussed.