Which networking strategy improves ICT startup companies' technical efficiency?

Abstract

Information and communications technology (ICT) startups, which are relatively smaller than large companies, need to choose efficiency‐oriented networking strategies to efficiently utilize resources. However, the effects of networking strategies on ICT startups' efficiency have been relatively neglected. This study explores which networking strategies are effective for ICT startups. We compare the efficiencies of ICT startups with different interfirm networking strategies: formal networking, informal networking, and noncooperative networking. Technical efficiencies of each strategic group were measured using stochastic frontier analysis, and efficiencies among groups were compared using meta‐frontier analysis. Our results reveal that the noncooperative group has the highest technology gap ratio, followed by the informal and formal cooperative networking groups. This study presents the optimal networking strategy for ICT startups and highlights that interfirm networking is not essential for enhancing the overall competitiveness to ICT startups.