Research On The Impact Of Entrepreneur's Social Capital To Startup's Performance

The startups that were represented by private corporations have increased rapidly in China. According to Global Entrepreneurship Monitor (GEM), Chinese Total Entrepreneurial Activity (TEA) index have exceeded America in 2005, and situated the fifth among 35 countries which participated in GEM. But all of these were achieved in the "not good" entrepreneurial environment. In other words, although the external environment was hostile, the governmental structure was faultful relatively, and internal resource was lack, small private corporations still achieved great development. This phenomenon is hardly explained in traditional theoretical framework. However, there is an important character to our country's startups—the founding and growth of them often depend on the social network which was built by entrepreneurs. Therefore, the social capital of entrepreneur which is derived from social network embeddedness is the main possible factor to explain the appearance and growth of new venture.Unfortunately, domestic academe seldom study the efficiency of entrepreneur's social capital or social networks empirically, while foreign researchers have been interested in "the network approach to entrepreneurship" broadly. Furthermore, when present researchers were talking about entrepreneur's social networks or social capital, they usually emphasized particularly on its "result"—the influence of entrepreneur's social capital to entrepreneurial action, rather than its "cause"—the factors which impact on the mobilization of social capital by entrepreneurs during their entrepreneurial process.Therefore, based on the theoretical and practical consideration, this paper concentrates the problem of Chinese entrepreneurs' social capital on the course of operation of new ventures, and investigates the process how entrepreneurs accumulated and mobilized their social capital which was an important resource endowment to secure the favorable ties to alters outside, and to realize the excellent performance of new ventures eventually. The paper is involved in three key questions. (1) What is the entrepreneur's social capital, and what are the dimensions of it? (2) What is the origin of entrepreneur's social capital, and what are the factors which will influence the stock of entrepreneur's social capital? (3) What are the effects from entrepreneur's social capital to the new venture? If these questions were replied, researchers could explaine how the Chinese entrepreneurs mobilized their social capital, and the entrepreneurs could understand how to accumulate social capital and what stakeholders they should connect during their entrepreneurial process.To answer the first question, based on the analysis and use for reference to the foreign study of entrepreneur's social networks, the third chapter imports the relations between entrepreneurs and their stakeholders which is an traditional analyses in domestic academe, and defines the entrepreneur's social capital as "network + resource", and compartmentalizes it into two components—structural dimension and relational resource dimension. Structural dimension borrows the size, heterogeneity and density of "core discussion network" which are in common use in foreign academe. Relational resource dimension is divided into three aspects by literature reviewing and investigating in small scope, they are business relational resource, institutional relational resource and other social relational resource.The fourth chapter answers the second question that the factors impact the origin of entrepreneur's social capital. Traditionally, starting from the universalism in personal intercourse, foreign researchers ascribe the origin of individual social capital to the similarity between individual's attitude, faith and personal traits, and use "similarity/attraction paradigm" to explain the reason why personal intercourse can produce. But considering the cultural difference in social capital, the constructural base of Chinese individual social capital is "Guanxi base" found on specialism in personal intercourse. Therefore, treating the difference in the concept of personal intercourse and constructural base of individual social capital between Chinese and Western as start point, this paper divides the acquiring approach of entrepreneur's social capital into ascribed relationship and achieved relationship, and impact entrepreneur's kinfolks, education, managerial experiment, industrial experiment, social competence and networking endeavor as the influential factors.The fifth chapter discusses the influence from entrepreneur's social capital to new venture's performance which answers the question of available of social capital. Although entrepreneurial performance is one of most important criterion variable, the definition of entrepreneurial performance construct is still faced with difficulty. Hence, the paper treats the organizational performance of start-ups as the entrepreneurial performance, and confirms two main dimensions—operating and growing performance and innovating performance using a three-dimensional evaluating frame. Then, using ancient research result and relative sociologic, economic theory for reference, the paper take new venture performance as independent variable, and discusses the possible influence from entrepreneur's social capital.The sixth chapter is empirical study. It aims at testing the hypothesis proposed in Chapter III and Chapter IV. After introducing the research methodology, the paper uses the data get from Jinan, Taian and Zibo to test the hypothesis relation among factors that impact on social capital origin, entrepreneur's social capital and new venture performance by factor analysis, correlation analysis, T test and multi-liner regression.To the methodology, the paper uses qualitative analysis and the quantitative analysis. Besides the systemic literature review and theoretical discuss about three key questions involved in this study, the paper also uses individual visiting, investigating in small scope and questionnaire statistic in large scale to ensure the study result in reason and in practice.By the empirical testing, the main conclusions of the paper are as follows: Firstly, the factors which impact on social capital origin do impact the entrepreneur's social networks in a certain extent. Thereinto, entrepreneur's industrial experience, social competence can impact on the network structure, while the kinfolk's position, entrepreneur's education and management experience have no influence on their network structure. These mean that the core discuss networks are the products of personal intercourse in the entrepreneur's long term career before his entrepreneurial action more possibly. And the past long term business interaction between entrepreneur and his alters is the key ingredient that determines the core discuss network structure.Secondly, the factors which impact on social capital origin do impact the relational resource dimension of entrepreneur's social capital in some extent. Thereinto, all of the factors listed in this research can impact on business relational resource. The status of entrepreneur's kinfolks, entrepreneur's education, management experience and networking endeavor can impact on institutional relational resource. This means that the interaction between entrepreneur and government personnel is more determined by the match of social status of each other. Similar to network structure, entrepreneur's industrial experiment, social competence and networking endeavor can impact his/her other social relational resource. This means that the relation between entrepreneur and funders, industrial technological experts and other managers in the same industry is also the outcome of business interaction in entrepreneur's long term career.Thirdly, in term of the testing to "network success hypothesis" in China, the size and heterogeneity of entrepreneur's "core discuss network" can facilitate new venture's operating and growing performance and innovating performance prominently. The density of social network can positively impact on the innovating performance of new venture, but the influence is not so prominent. Though the result is not consistent with the hypothesis, the finding holds out in some extent the viewpoint that high density of manager's personal network will promote the outcome of innovating performance. Lastly, in term of the influence from relational resource dimension of social capital to startup's performance, entrepreneur's business relational relation, institutional relational relation and other social relational resource all can facilitate the operating performance prominently. The business relational resource and other social resource can be available to innovating performance. These findings validate the special importance in the process that stakeholders provide information, resource and support to entrepreneurs. But the relation between institutional relational resource and innovating performance hasn't been confirmed.In contrast to other research about entrepreneur's social capital, the innovation and theoretical development of this research are embodied in several aspects: (l)It expatiates on two dimensions of Chinese entrepreneur's social capital using a bidirectional viewpoint. Based on the comprehensive review to the structural and resource feature of entrepreneur's social network, it puts forward two access approaches of social capital, and tests them empirically. (2)It builds a new model to test the impact from entrepreneur's social capital to startup's performance. Using the data from first hand, it explores the influence from structural and resource dimensions of social capital to startup's performance empirically. (3)Using the concept of "social embeddedness", it constitutes a framework systematically to explain the relation among the origin of social capital, the composition of entrepreneur's social capital and startup's performance. The framework will improve the ability of forecast and interpretation of entrepreneur's social capital theory, and enrich the outcomes of social capital research.