Institutional Polycentrism, Entrepreneurs’ Social Networks, and New Venture Growth

59 Pages Posted: 22 Dec 2013

See all articles by Bat Batjargal

Bat Batjargal

Stanford University - Center for Russian, East European and Eurasian Studies (CREEES); Peking University

Michael A. Hitt

Texas A&M University - Department of Management; Texas Christian University

Anne S. Tsui

Arizona State University; University of Notre Dame; Peking University - Guanghua School of Management; Fudan University

Jean‐Luc Arregle

EM LYON Business School

Justin Webb

Oklahoma State University - Tulsa

Toyah Miller

Indiana University - Kelley School of Business - Management & Entrepreneurship

Date Written: Sept 20, 2013

Abstract

What is the interrelationship among formal institutions, social networks, and new venture growth? Drawing on the theory of institutional polycentrism and social network theory, we examine this question using data on 637 entrepreneurs from four different countries. We find the confluence of weak and inefficient formal institutions to be associated with a larger number of structural holes in the entrepreneurial social networks. While the effect of this institutional order on the revenue growth of new ventures is negative, a network’s structural holes have a positive effect on the revenue growth. Furthermore, the positive effect of structural holes on the revenue growth is stronger in an environment with a more adverse institutional order (i.e., weaker and more inefficient institutions). The contributions and implications of these findings are discussed.

Keywords: Institutional polycentrism, networks, new venture growth, Institutions, Networks, Entrepreneurship, New ventures, and Emerging economies

JEL Classification: B52, C12, D02, L26, M13

Suggested Citation

Batjargal, Bat and Hitt, Michael A. and Tsui, Anne S. Y. and Arregle, Jean-Luc and Webb, Justin and Miller, Toyah, Institutional Polycentrism, Entrepreneurs’ Social Networks, and New Venture Growth (Sept 20, 2013). William Davidson Institute Working Paper No. 1060, Mays Business School Research Paper No. 2370597, Available at SSRN: https://ssrn.com/abstract=2370597 or http://dx.doi.org/10.2139/ssrn.2370597

Bat Batjargal (Contact Author)

Stanford University - Center for Russian, East European and Eurasian Studies (CREEES) ( email )

625 Massachusetts Avenue
Room 240A
Cambridge, MA 94305-2006
United States

Peking University ( email )

Guanghua School of Management
Beijing 100871
China
86-10-6275-7763 (Phone)

Michael A. Hitt

Texas A&M University - Department of Management ( email )

430 Wehner
College Station, TX 77843-4218
United States
979-458-3393 (Phone)

Texas Christian University ( email )

Fort Worth, TX 76129
United States

Anne S. Y. Tsui

Arizona State University ( email )

Farmer Building 440G PO Box 872011
Tempe, AZ 85287
United States

University of Notre Dame

361 Mendoza College of Business
Notre Dame, IN 46556-5646
United States

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China
852 2358 7727 (Phone)
852 2335 5325 (Fax)

Fudan University

Beijing West District Baiyun Load 10th
Shanghai, 100045
China

Jean-Luc Arregle

EM LYON Business School ( email )

23 Avenue Guy de Collongue
Ecully, 69132
France

Justin Webb

Oklahoma State University - Tulsa ( email )

700 North Greenwood
Tulsa, OK 74106
United States

Toyah Miller

Indiana University - Kelley School of Business - Management & Entrepreneurship ( email )

Bloomington, IN 47405
United States

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