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.