Reducing the resource acquisition costs for returnee entrepreneurs: role of Chinese national science parks

Abstract

PurposeThe purpose of this paper is to empirically explore the mechanisms through which Chinese National Science Parks' (NSPs) services facilitate returnee entrepreneurs' (REs) acquisition of resources for their new ventures. Resource acquisition is crucial for new ventures, but it inevitably leads to significant costs increase. Although the NSPs offer various services to REs to reduce these costs, they still struggle to find the right mix of services.Design/methodology/approachFrom the transaction cost's perspective, an exploratory multiple-case study was conducted with data collected from six NSPs in China.FindingsThe results reveal that four types of NSP services (mentoring and training, social event, promotion of REs and accreditation of resource holders (RHs)) have both individual and joint effects on reducing REs' resource acquisition costs. Specifically, the “accreditation of RHs” service directly helps REs reduce search costs. The combination of “accreditation of RHs”, “promotion of REs” and “social event” services help REs and RHs to establish guanxi. Further, guanxi, working along with the “mentoring and training” service, helps REs to reduce contracting, monitoring and enforcement costs.Originality/valueThis study is among the first to explore the matching mechanisms between science parks’ services and entrepreneurs' cost reduction. This helps reconcile the inconsistent findings on science parks' effect by explaining why some NSPs are able to provide strong support to REs while others are less successful. In addition, the findings are useful for NSPs to develop the right mix of tailored services for REs. Finally, REs will find this study useful to evaluate which NSP is a more suitable location for their new ventures.