The effectiveness of cohesive and diversified networks: A meta-analysis

Abstract

a b s t r a c tThe entrepreneurship literature recognizes the substantial contributions of networks to firm performance. However, the circumstances under which cohesive versus diversified networks drive firm performance remain unclear. To rectify this situation, the present meta-analysis integrates the results of 68 independent samples (N = 16,364). The findings indicate both cohesive and diversified networks relate to performance (r c = .164 and r c = .182). Moderator analyses suggest that diversified networks are particularly effective for large firms, firms competing in innovative industries and in well-developed financial markets. Cohesive networks relate to performance in small firms but not in large firms. These findings suggest that the relationship between networks and performance is context-dependent.

Entrepreneurial networking: a blessing or a curse? Differential effects for low, medium and high performing franchisees

“…However, other studies have pointed at the downsides of entrepreneurial networking-such as opportunity costs and governance problems-that may negatively affect firm performance (e.g. Watson 2007;Jack 2010;Rauch et al 2016). Overall, there is still little consensus on how and under what conditions entrepreneurial networking affects firm performance (Stam et al 2014).…”

“…Second, researchers have largely focused on the effect of isolated network characteristics, such as an entrepreneur's network position or relationship quality, on entrepreneurial outcomes. This has resulted in a lack of consistent theoretical frameworks that take into account multiple facets of entrepreneurial networking in explaining performance (Jack 2010;Rauch et al 2016). Third, only relatively few studies have taken into account contingencies, such as firm or industry characteristics, that might condition the effects of networking on entrepreneurial performance (Stam et al 2014;Rauch et al 2016).…”

“…Our final contribution to the networking literature is that our study is among the few to include a contingency that may influence the effects of networking on entrepreneurial outcomes (following Stam et al 2014;Rauch et al 2016). Contingencies can be present at different levels, such as the individual entrepreneur (e.g.…”

“…Contingencies can be present at different levels, such as the individual entrepreneur (e.g. Ritter and Gemünden 2003), the firm (Stam et al 2014), the type of industry (Rauch et al 2016) or the economy (Stam et al 2014). Some general networking studies have looked at actors' network utilization by studying the skills and abilities that influence how actors are able to utilize the resources acquired via their networks (e.g.…”

“…Recent work by Stam et al (2014), Hayter (2015) and Rauch et al (2016) provides examples of studies demonstrating that characteristics and capacities of actors affect if and to what extent they can benefit from the network resources they have access to. The meta-analysis of Rauch et al (2016), however, clearly demonstrates that the majority of network studies still does not include such contingencies. Building on learning and knowledge perspectives, an actor's network utilization is contingent upon two characteristics.…”