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

Author

Listed:
  • Bat Batjargal

    (Harvard University, Peking University [Beijing])

  • Michael Hitt

    (Texas A&M University [College Station])

  • Anne Tsui

    (Fudan University [Shanghai], Shanghai Jiao Tong University [Shanghai], Peking University [Beijing], ASU - Arizona State University [Tempe])

  • Jean-Luc Arregle

    (EM - EMLyon Business School)

  • Justin Webb

    (OSU - Oklahoma State University [Stillwater])

  • Toyah Miller

    (Indiana State University)

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 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 revenue growth. Furthermore, the positive effect of structural holes on 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.

Suggested Citation

  • Bat Batjargal & Michael Hitt & Anne Tsui & Jean-Luc Arregle & Justin Webb & Toyah Miller, 2013. "Institutional Polycentrism, Entrepreneurs' Social Networks, and New Venture Growth," Post-Print hal-02276709, HAL.
    • Handle: RePEc:hal:journl:hal-02276709
    DOI: 10.5465/amj.2010.0095
    Note: View the original document on HAL open archive server: https://hal.science/hal-02276709
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