A Matching Theory of Entrepreneurs' Tie Formation Intentions and Initiation of Economic Exchange

Vissa, Balagopal

doi:10.2139/ssrn.1550086

Cited by 76 publications

(130 citation statements)

References 63 publications

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“…A growing body of research suggests that entrepreneurial firms' early relationships promote their success by helping them overcome initial resource constraints (Katila, Rosenberger, & Eisenhardt, 2008;Ozcan & Eisenhardt, 2009), rise above disadvantaged social positions (Hallen, 2008;Vissa, 2011), and gain access to such diverse audiences as potential investors (Gulati & Higgins, 2003), alliance partners (Pollock & Gulati, 2007), the media (Santos & Eisenhardt, 2009), and customers (Elfring & Hulsink, 2003). Conceptually, researchers have framed relationship formation as an effective strategy that entrepreneurial firms can employ to help overcome their "liability of newness" (Baum, Calabrese, & Silverman, 2000;Stinchcombe, 1965) and to grow and develop (Khaire, 2010;Stuart, 2000).…”

Section: Introductionmentioning

confidence: 99%

Exposed: Venture Capital, Competitor Ties, and Entrepreneurial Innovation

Pahnke

McDonald

Wang

et al. 2015

AMJ

151

112

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This paper investigates the impact of early relationships on innovation at entrepreneurial firms. Prior research has largely focused on the benefits of network ties, documenting the many advantages that accrue to firms embedded in a rich network of inter-organizational relationships. In contrast, we build on research emphasizing potential drawbacks to examine how competitive exposure, enabled by powerful intermediaries, can inhibit innovation. We develop the concept of competitive information leakage, which occurs when firms are indirectly tied to their competitors via shared intermediary organizations. To test our theory, we examine every relationship between entrepreneurial firms and their venture capital investors in the minimally-invasive surgical segment of the medical device industry over a 22-year period. We find that indirect ties to competitors impede innovation, and that this effect is moderated by several factors related to the intermediary's opportunities and motivation to leak important information. ABSTRACTThis study investigates the impact of early relationships on innovation at entrepreneurial firms. Prior research has largely focused on the benefits of network ties, documenting the many advantages that accrue to firms embedded in a rich network of inter-organizational relationships. In contrast, we build on research emphasizing potential drawbacks to examine how competitive exposure, enabled by powerful intermediaries, can inhibit innovation. We develop the concept of competitive information leakage, which occurs when firms are indirectly tied to their competitors via shared intermediary organizations. To test our theory, we examine every relationship between entrepreneurial firms and their venture capital investors in the minimally-invasive surgical segment of the medical device industry over a 22-year period. We find that indirect ties to competitors impede innovation, and that this effect is moderated by several factors related to the intermediary's opportunities and motivation to leak important information.

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Section: Introductionmentioning

confidence: 99%

Exposed: Venture Capital, Competitor Ties, and Entrepreneurial Innovation

Pahnke

McDonald

Wang

et al. 2015

AMJ

151

112

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“…Second, while past studies of tie formation have focused on homophily (Ingram & Morris, 2007; McPherson, Smith-Lovin, & Cook, 2001), reciprocity (Blau, 1964), relational transitivity (Granovetter, 1973), social foci (Dahlander & McFarland, 2013;Feld, 1981), and matching (Vissa, 2011), the out that social relations are not only important to economic work (Granovetter, 1985) but play an important part in such transitions, helping individuals socially integrate and discover norms (Morrison, 2002;Podolny & Baron, 1997). Although the question of what makes two actors form a tie has merits on its own, we fix our aim on the trust levels in newly gained contacts for two reasons.…”

Section: Introductionmentioning

confidence: 99%

Relational Changes During Role Transitions: The Interplay of Efficiency and Cohesion

Jonczyk

Lee

Galunic

et al. 2016

AMJ

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This study looks at what happens to the collection of relationships (network) of service professionals during a role transition (promotion to a management role). Our setting is three professional service firms where we examine changes in relations of recently promoted service professionals (auditors, consultants, and lawyers). We take a comprehensive look at the drivers of two forms of network changes -tie loss and tie gain. Looking backward we examine the characteristics of the contact, the relationship, and social structure and identify which forces are at play in losing ties, revealing an overarching tendency for both cohesion and efficiency forces to play a role. Looking forward, we identify the effect of previous network structures that act as a "shadow of the past" and impact the quality of newly gained relations during the role transitions. Findings demonstrate that role transitions are not only influenced by a few key contacts but that the entire (extant) network of professional relationships shapes the way people reconfigure their workplace relations during a role transition. ABSTRACTThis study looks at what happens to the collection of relationships (network) of service professionals during a role transition (promotion to a management role). Our setting is three professional service firms where we examine changes in relations of recently promoted service professionals (auditors, consultants, and lawyers). We take a comprehensive look at the drivers of two forms of network changes -tie loss and tie gain. Looking backward we examine the characteristics of the contact, the relationship, and social structure and identify which forces are at play in losing ties, revealing an overarching tendency for both cohesion and efficiency forces to play a role. Looking forward, we identify the effect of previous network structures that act as a "shadow of the past" and impact the quality of newly gained relations during the role transitions. Findings demonstrate that role transitions are not only influenced by a few key contacts but that the entire (extant) network of professional relationships shapes the way people reconfigure their workplace relations during a role transition.

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“…The primary function of caste is to regulate interpersonal interactions in religious, social, and economic life by creating a hierarchal division of society into varnas and jatis and specifying the interaction permissible among these groups (Chen et al, ; Ghurye, ; Srinivas, ). Caste‐based ties have been very sparsely analyzed in the management literature (see Chen et al, ; Vissa, ). Vissa () studied the impact of caste‐based homophily in the context of an entrepreneur's network formation, that is, how does social similarity influence an entrepreneur's interpersonal tie formation intentions.…”

Section: Literature Review and Proposition Developmentmentioning

confidence: 99%

“…Caste‐based ties have been very sparsely analyzed in the management literature (see Chen et al, ; Vissa, ). Vissa () studied the impact of caste‐based homophily in the context of an entrepreneur's network formation, that is, how does social similarity influence an entrepreneur's interpersonal tie formation intentions. A recent article by Chen et al () examined how do social networks based on caste and language similarity between equity analysts and CEOs affect the accuracy of the analyst's forecasts of the focal firm earnings per share (EPS).…”

Section: Literature Review and Proposition Developmentmentioning

confidence: 99%

Impact of top management team sociodemographic faultlines on speed of foreign direct investment expansion: An emerging market perspective

Chhabra

Popli

2019

Strategic Change

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In an emerging market context, the strength of sociodemographic faultlines of the top management team (TMT) might negatively impact the speed of firm's foreign direct investment (FDI) expansion. Building on upper echelon perspectives, the study proposes testable propositions on the role of sociodemographic faultlines (based on age, caste, and language) of the TMT on the speed of firm's FDI expansion. The role of decision‐making in TMT is crucial for embarking upon such strategic actions and analyzing those that are pertinent for the international business scholarship. Furthermore, we propose that the degree of inward foreign competition faced by the firms and the prior international experience of the TMT will moderate this relationship.

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A Matching Theory of Entrepreneurs' Tie Formation Intentions and Initiation of Economic Exchange

Cited by 76 publications

References 63 publications

Exposed: Venture Capital, Competitor Ties, and Entrepreneurial Innovation

Exposed: Venture Capital, Competitor Ties, and Entrepreneurial Innovation

Relational Changes During Role Transitions: The Interplay of Efficiency and Cohesion

Impact of top management team sociodemographic faultlines on speed of foreign direct investment expansion: An emerging market perspective

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