A Matching Theory of Entrepreneurs' Tie Formation Intentions and Initiation of Economic Exchange

Abstract

This study advances our understanding of network dynamics by applying matching theory to examine entrepreneurs’ intentions to add new ties to their personal network. I propose that task complementarity and social similarity are important matching criteria that influence entrepreneurs’ interpersonal tie formation intentions, and test whether good matches increase the likelihood of initiation of economic exchange ties. The novel research design using data from business cards of new people met by a panel of Indian entrepreneurs reveals effects of matching and suggests that while entrepreneurs intentionally pursue valuable connections they may be only partially accurate in their assessment of value.

Keywords: Entrepreneurship, Personal Networks, Tie Formation, India, Planned Behaviour