Industry ties, entrepreneurs' employment experience and resource acquisition of new ventures in China

Abstract

PurposeSocial network theory emphasizes that, to acquire needed resources, new ventures should cultivate industrial connections (intra-industry ties and extra-industry ties). In the meanwhile human capital theory focuses on entrepreneurs' employment experience, especially with respect to its breadth and depth. This study examines ties and experience to determine whether, in combination, they have positive or negative effects on resource acquisition in new ventures.Design/methodology/approachThis study tests research hypotheses using questionnaire survey data with a sample of entrepreneurs in new ventures. Multivariate regression analysis is used to analyze the data.FindingsCombining intra-industry ties and experience breadth or extra-industry ties and experience depth affects resource acquisition positively, whereas combining intra-industry ties and experience depth or extra-industry ties and experience breadth affects resource acquisition negatively.Research limitations/implicationsConclusions may be constrained by the limited sample size and source. Rather, the impact of the study lies in its identification of the effects of interaction between network ties and entrepreneurs' experience on resource acquisition. Future research can explore the effects of interaction between other dimensions of network ties and a range of entrepreneurs' experience characteristics on resource acquisition.Practical implicationsEntrepreneurs are provided with effective strategies to make use of their ventures' network ties and their personal accumulated experience in the process of obtaining resources.Originality/valueThe findings enrich the entrepreneurship literature by providing a more nuanced understanding of how and when new ventures' industry ties and entrepreneurs' employment experience together influence resource acquisition.

The secrets to successful entrepreneurship: how occupational experience shapes the creation and performance of start-ups

“…With regard to the relationship between work experience and entrepreneurial performance, the present research believes that work experience accumulated from previous jobs can promote founders to acquire relevant knowledge and skills as well as achieve success (e.g., Federico et al, 2009;Ulvenblad et al, 2013;Astebro and Yong, 2016;Arte et al, 2017;Zhao et al, 2021), because the organisations entrepreneurs worked for are perfect places for them to approach information, acquire skills, and absorb knowledge (Sørensen and Fassiotto, 2011). What they acquired from their former employers will be unconsciously transmitted to the new context of start-ups, which can produce positive effects on the performance of nascent firms (Agarwal et al, 2016).…”

“…, 2009; Ulvenblad et al. , 2013; Astebro and Yong, 2016; Arte, 2017; Zhao et al. , 2021), because the organisations entrepreneurs worked for are perfect places for them to approach information, acquire skills and absorb knowledge (Sørensen and Fassiotto, 2011).…”

“…In conclusion, although researchers have reached a general consensus on the importance of founders' work experience, the present studies on the relationship between the types of work experience and entrepreneurial performance are still relatively superficial. Founders' work experience varies in degree and nature; however, its differential roles in resource acquisition in new ventures have not been thoroughly examined (Zhao et al. , 2021).…”

“…In conclusion, although researchers have reached a general consensus on the importance of founders' work experience, the present studies on the relationship between the types of work experience and entrepreneurial performance are still relatively superficial. Founders' work experience varies in degree and nature; however, its differential roles in resource acquisition in new ventures have not been thoroughly examined (Zhao et al, 2021). The approach normally dividing work experience into general and specific experiences is used in accordance with the theoretical hypothesis of "knowledge corridor," but ignores the influence of work experience on the founders' competence and capital.…”

Scaling up sustainable innovation: Stakeholder ties, eco‐product innovation, and new product performance

“…First, extra-industry stakeholder ties provide firms with access to diverse and novel resources that are not readily available within their existing networks (Zhao et al, 2021). These stakeholders, such as research institutions, environmental organizations, and technology providers from different industries, can offer unique perspectives, technologies, expertise, and materials relevant to eco-innovation.…”