Homophily and Resource-Seeking Behavior in New Venture Network Formation

Babson College Entrepreneurship Research Conference (BCERC) 2007

Frontiers of Entrepreneurship Research 2007

Posted: 6 Dec 2007

See all articles by Elissa B. Grossman

Elissa B. Grossman

Loyola Marymount University

Helena Yli-Renko

University of Southern California - Marshall School of Business

Ramkumar Janakiraman

University of South Carolina - Darla Moore School of Business

Abstract

We draw upon resource-based and sociological theories to shed light on nascent entrepreneurs' network development. Employing a unique empirical dataset of nascent entrepreneurs at the earliest stages of venture creation, we examine resource search and homophily as two antecedents of entrepreneurs' value attributions in network development. Our results confirm that resource multiplexity increases perceived relationship value. Contrary to our prediction, however, homophily does not have a significant direct effect; instead, homophily amplifies the positive effects of resource multiplexity. These results suggest a view of entrepreneurial network development in which instrumental resource search is the primary driver, with interpersonal similarity playing a moderating role.

Keywords: Entrepreneurship

JEL Classification: M13

Suggested Citation

Grossman, Elissa B. and Yli-Renko, Helena and Janakiraman, Ramkumar, Homophily and Resource-Seeking Behavior in New Venture Network Formation. Babson College Entrepreneurship Research Conference (BCERC) 2007; Frontiers of Entrepreneurship Research 2007. Available at SSRN: https://ssrn.com/abstract=1060141

Elissa B. Grossman (Contact Author)

Loyola Marymount University ( email )

Los Angeles, CA 90045
United States

Helena Yli-Renko

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

Ramkumar Janakiraman

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States
8037770534 (Phone)

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