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How Entrepreneurs' Knowledge and Network Ties Relate to the Number of Employees in New SMEs


  • Diane M. Sullivan is an assistant professor at the University of Dayton.

  • Mathew R. Marvel is an assistant professor at Western Kentucky University.

Diane M. Sullivan, University of Dayton, 300 College Park, Dayton, OH 45469-2271. E-mail:


Knowledge is central to entrepreneurship when explaining successful venturing. However, little is known about how a founder's knowledge and their network ties relate to the number of workers in early-stage small and medium-sized enterprises (SMEs). This study draws on the knowledge-based view and social network theory to examine 174 new SME founders. Findings suggest a positive relationship between the comprehensiveness of an entrepreneur's knowledge set and the number of workers. In addition, the number of network ties positively moderates the relationship between the entrepreneur's knowledge set and the number of employees. Network tie knowledge heterogeneity was not significantly related to the number of employees in new SMEs.