Start-up firms' networks for innovation: embedded in entrepreneurs' networks in private and public spheres

Abstract

We develop a model of how a start-up firm's networking for innovation is embedded in the personal network around the entrepreneur. Using data from the Global Entrepreneurships Monitor including 11,792 start-ups from 38 countries surveyed in 2012--13, we examine how entrepreneurs' networking in private and public spheres is impacting (1) innovation (2) firms' collaborative networking, and (3) the effectiveness of firms' collaborative networking for innovation. The analyses show that entrepreneurs' networking in the public sphere has a direct positive impact on start-ups' innovation, while networking in the private sphere reduces innovation. Firms' networking for innovation intensifies with larger public sphere networks around the entrepreneurs but decreases with larger private sphere networking. Also, large private sphere networks around the entrepreneurs decrease effectiveness of networking for innovation. These findings refine our knowledge of the functioning of start-up firms' networking for innovation, especially the positive and negative imprints of the entrepreneurs' networking in the public and private spheres.