Social Ties and New Venture Performance: The Moderated Mediating Effects of Entrepreneurial Motivations

Abstract

Entrepreneurial motivations, especially opportunity-based entrepreneurship, have attracted increasing research attention due to their high potential for promoting national competitiveness, yet few studies explicitly examine their determinants or impacts on new venture performance at the microlevel in emerging economies. Drawing on social network theory and institutional theory, this study distinguishes the impacts of business and political ties on opportunity-based entrepreneurship and their effect on new venture performance in different institutional environments. The empirical findings from multilevel datasets from China reveal that business ties have a stronger positive effect on opportunity-based entrepreneurship than political ties. Opportunity-based entrepreneurship has a stronger positive effect on new venture performance than necessity-based entrepreneurship, and these effects depend on government fiscal transparency. Overall, entrepreneurs’ opportunity-seeking motivation mediates the relationship between business ties and new venture performance.