Networking Ability and the Financial Performance of New Ventures: A Mediation Analysis among Younger and More Mature Firms

Authors


Correspondence to: Thorsten Semrau, Faculty of Management, Economics and Social Sciences, University of Cologne, Albertus-Magnus-Platz, Cologne, Germany 50923. E-mail: semrau@wiso.uni-koeln.de

Abstract

We hypothesize that entrepreneurs' networking ability—an individual-level skill widely studied in career research—positively influences new ventures' financial performance. Additionally, we propose that this impact is mediated by new ventures' network characteristics and moderated by venture age. When testing our hypotheses based on a sample of 146 German entrepreneurs, we find them largely confirmed. Our results show a significant relationship between entrepreneurs' networking ability and their new ventures' financial performance, which is mediated by new ventures' network size and the strength of network relationships. Additionally, the relationships observed are salient for younger but not for more mature firms. Copyright © 2012 Strategic Management Society.

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