How Exactly Do Network Relationships Pay Off? The Effects of Network Size and Relationship Quality on Access to Start-Up Resources

Authors


  • A previous version of the paper was presented at the 13th Annual Interdisciplinary Entrepreneurship Conference 2009, Leipzig, Germany.

Abstract

Entrepreneurs are expected to profit from network relationships. Research addressing the link between entrepreneurs' network characteristics and their performance, however, has so far produced inconclusive results. In an attempt to explain these inconsistencies, we investigate the resource returns connected to network size and relationship quality. Based on a sample of 379 nascent entrepreneurs, we find that increasing network size and relationship quality results in diminishing marginal returns in terms of access to financial capital, knowledge and information, and additional business contacts. Additionally, we observe that the returns vary strongly by resource type.

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