Exploring the Role of Network Intensity to Achieve Better Performance: A Case of Indonesian Ethnic Enterprises

This study intends to bring more insight from a different perspective of ethnic entrepreneurship studies by providing empirical evidence about the relationship between network intensity in ethnic community network and performance. The social network theory is used as the underlying theoretical framework, while a positivist paradigm with an explanatory research design is adopted to examine the characteristics of network intensity on enterprise performance. This study undertook a structured survey of 100 Javanese ethnic enterprises in North Sumatra, Indonesia and 100 Minang ethnic enterprises in Yogyakarta, Central Java, Jakarta and Bogor (Indonesia) from September to November 2019. This study finds that the performance of the ethnic enterprises who joined the ethnic network (paguyuban) are having better performance (N = 134) than those who do not join (N = 66), but indifferent between the Javanese and Minang enterprises. Next, using the logistic regression, this study reveals that the dimensions of the wide variety of activities and high frequency of attendance (within the network) have more dominant odds in delivering better performance for the Javanese ethnic enterprise, compared to those for the Minang ones. These findings are in line with inward-looking or solidifying bonding within their ethnic network, or so-called the identity-based network that looks for depth and breadth in the network. In contrast, only the wide variety of activities dimension positively affects better performance in the Minang ethnic enterprises. This finding implies that the Minang ethnic entrepreneurs tend not to invest much time and energy to attend community activities frequently. Instead, they also divide their time to explore new networks for access to new external resources. Further discussion and implication are also presented.