Abstract
This study examines the influence of intra-industry and extra-industry networks on firm performance by using data on 1264 UK venture-capital-backed start-up companies. The venture's network was operationalized by connecting together the various portfolio companies sharing the same investor. Regression results show that the venture's network has a strong impact on firm's success. Yet, whereas extra-industry ties are directly and positively linked to the likelihood of the venture to reach a successful exit, intra-industry ties exert a negative impact on companies' performances. However, interaction effects show that once a firm establishes a sufficient number of extra-industry ties, it is able to profit from the network in its industry of operation. Overall, these findings show that an optimal balance of ties is achieved through a diverse set of connections incorporating both intra-industry and extra-industry ties.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 129-144 |
| Number of pages | 16 |
| Journal | Managerial and Decision Economics |
| Volume | 35 |
| Issue number | 2 |
| DOIs | |
| State | Published - Mar 2014 |
| Externally published | Yes |
ASJC Scopus subject areas
- Business and International Management
- Strategy and Management
- Management Science and Operations Research
- Management of Technology and Innovation