Why do some entrepreneurs thrive? A network content perspective

Abstract

Why do some entrepreneurs in developing environments thrive whereas others fail, even though they all face the same uncertainties? Prior research on entrepreneurial networks has attributed differences in business performance to variations in network structure. However, many entrepreneurs—such as necessity entrepreneurs—have networks with low structural variation. We show that variations in network content may be an alternative explanation for performance differences. Drawing on the resource-based view, we propose that entrepreneurs whose networks are characterized by low structural variation may benefit from variations in network content—namely, greater resource variety and more resource spanning. Our argument is supported strongly by a random sample of 200 Chinese necessity entrepreneurs working in Shanghai. By bringing network content to the analytical fore, we contribute to research on entrepreneurial networks, which has focused mostly on network structures. We further add to research on necessity entrepreneurship by examining how heterogeneous network content may influence business performance.