When Do Family Ties Matter? Entrepreneurial Market Opportunity Recognition and Resource Acquisition in Family Firms

Abstract

This paper focuses on the role of kinship or family ties in entrepreneurial activities. We develop theoretical models of entrepreneurial market opportunity recognition and resource acquisition for family firms based upon social network theory. Building upon Granovetter’s (1973) distinction between strong and weak ties, we introduce family ties as a special category of strong ties. To model these key entrepreneurial processes we adapt Boorman’s (1975) model of transmission of job information through a social network. Results demonstrate the importance of family ties for entrepreneurial opportunity recognition, but not for resource acquisition.

Keywords: Entrepreneurship

JEL Classification: M13