An Empirical Research On The Relationship Among Entrepreneurs’ Social Capital, Opportunity Exploration And New Venture Growth

Entrepreneurial activities are of great importance for the development ofeconomy and society. Entrepreneurial activities can promote innovation and industrialrestructuring, provide jobs, and create a positive cultural atmosphere.Entrepreneurship attracts social concern. They improve the entrepreneurialenvironment and encourage the public people’s entrepreneurial and innovativeactivities in order to stimulate the vitality of the billions entities in the mirco market,and build a new engine for economic development. Recently, with the marketenvironment improve effectively, entrepreneurial activities keep rising, andentrepreneurial economy develops in an all-around way. China is one of the mostactive countries of entrepreneurship. However, with the development ofentrepreneurial activities, most entrepreneurial firms have to face the growth problem.Entrepreneurs are troubled by the short lifetime of the start-ups. Because of theliability of newness and the market entry barriers, the new ventures are faced withgrave challenges. Several reports have pointed that the average lifetime of firms isless than5years. It is a great problem for both the entrepreneurs and the society.Entrepreneurs’ resources play an important role in the entrepreneurial process.These resources can effectively promote the development of the new venture. Socialcapital embedded in the social network, it reflects the individual’s ability to access toresources through social ties. Due to the liability of newness, new ventures are unableto obtain the necessary resources needed in the early stage. New ventures need todepend on the entrepreneur’s personal capital and ability. It is very important thatentrepreneurs acquire the key and complementary resources such as information,capital and technology through their social capital. A growing number of researchessuggest that entrepreneurs’ social capital can provide important support for theentrepreneurial process. Especially in China, the relationship orientation is animportant feature in daily life and economic activities. In order to meet the demand ofresources, entrepreneurs need to get the social support from their relational network.Entrepreneur’ social capital can bring substantial resources, valuable information andknowledge for new ventures, which is advantageous to identify and explore business opportunities, integrate the resources, promote management ability, and devote fortechnological innovation. It can increase the possibility of entrepreneurial success andsustained growth of new ventures.Entrepreneurial opportunity is one of the core elements of entrepreneurship.From the perspective of entrepreneurial opportunity, scholars point thatentrepreneurship is the process of entrepreneurs to identify and make use of theopportunities. Entrepreneurial opportunity is the premise of entrepreneurial activities.The exploration of opportunity is a landmark event in the entrepreneurial process, andit is also the basis of the entrepreneurial activities for it can affect the future growth ofnew ventures. After identifing entrepreneurial opportunities, entrepreneurs will decideto explore the opportunity. And the decision-making process can largely reflect thedecisions on resources allocation and business operation, which can directly affect thefinancial returns and growth performance. New ventures should identifyentrepreneurial opportunities and organize resources into the opportunity explorationactivities. Thus they can turn an opportunity into great value and gain sustainablegrowth.According to the analysis above, two variables——entrepreneur’s social capitaland opportunity exploration will influence new venture growth. And the twoprocesses are not separately. Entrepreneur’s social capital has an important influenceon opportunity exploration. Therefore, this dissertation focuses on the mechanism ofentrepreneurs’ social capital forms productive force and promotes new venture growthby investigating the Chinese entrepreneurs and new ventures in order to know moreabout entrepreneur’s social capital and new venture growth. Analysis the relationshipamong the three variables will provide information for the academic studies. Thisdissertation proposes a theoretical framework of entrepreneur’s social capital,opportunity exploration and new venture growth based on the related literature. Andenvironmental dynamics plays a moderating role as it can have significant impact onthe growth performance. Several hypothesizes are also proposed. After analyzing thedata collected, this empirical research found the following conclusions.First of all, entrepreneur’s social capital has a significant positive impact on newventure growth; the two dimensions of entrepreneur’s social capital——relational andstructural dimensions have direct positive impact on new venture growth. However,cognitive dimension has no significant effect on the new venture growth. Secondly,the three dimensions of entrepreneur’s social capital have significant positive impact on both innovative and imitative opportunity exploration. Thirdly, opportunityexploration has a direct positive impact on new venture growth. Both innovative andimitative opportunity exploration have significant positive impact on new venturegrowth. Fourthly, innovative and imitative plays a partial intermediate role betweenentrepreneur’s social capital and new venture growth. Fifthly, the results show that theenvironmental dynamic is a moderator between innovative opportunity explorationand new venture growth. In a more dynamic environment, innovative opportunityexploration has a stronger impact on new venture growth. But the moderate effect ofenvironmental dynamic between imitative opportunity exploration and new venturegrowth is not confirmed.By analyzing the relationship among the variables, this dissertation reveals themechanism that how entrepreneur’s social capital affects new venture growth throughopportunity exploration, and revealing the moderate variable of the relationshipbetween opportunity exploration and new venture growth which enrich the theory andempirical research, as well as clarify the nature of the variables. The results canprovide the development strategies and recommendations for the entrepreneurialactivities and new venture growth. In the entrepreneurial process, entrepreneursshould pay attention to the role of their social capital, and acquire external supportthrough the social capital to seize the market opportunities and continuously improvetheir competitive advantage in order to form the sustainable development mode. Thevitality of millions of micro entities in the market will be stimulated in order topromoting the sound development of economy and society.