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Excessive Ties in Entrepreneurship Can Hurt: How Excess Entrepreneurial Ties Bring Negative Effects to the Firm

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  • Lijun Xu
  • Yun Zhu
  • Chuanyang Ruan
  • Weijin Shi

Abstract

Entrepreneurial ties are a critical resource for development and survival of entrepreneurial firms; however, the mechanism of how entrepreneurial ties affect entrepreneurial performance remains unclear. This study advances existing research on social ties and entrepreneurship through investigating how entrepreneurial ties exert a curvilinear impact on entrepreneurial performance via absorptive capacity, and the curvilinear effect of entrepreneurial ties is contingent on environmental complexity. The present study uses a dyadic dataset of 223 entrepreneurs from creativity industries in China to examine hypotheses. The results show that entrepreneurs’ ties have an inverted U-shaped impact on entrepreneurial performance. We also partially find that this inverted U-shaped relationship is mediated by absorptive capacity. Finally, we also find that this inverted U-shaped relationship is steeper when environmental complexity is high, and this inverted U-shaped relationship turns into an almost positive linear when environmental complexity is low. Overall, these results contribute to a deeper understanding of how and when entrepreneurial ties lead to a curvilinear impact on firm outcomes.

Suggested Citation

  • Lijun Xu & Yun Zhu & Chuanyang Ruan & Weijin Shi, 2021. "Excessive Ties in Entrepreneurship Can Hurt: How Excess Entrepreneurial Ties Bring Negative Effects to the Firm," SAGE Open, , vol. 11(2), pages 21582440211, June.
    • Handle: RePEc:sae:sagope:v:11:y:2021:i:2:p:21582440211025533
    DOI: 10.1177/21582440211025533
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