VIII-S6

SUMMARY

THE NETWORK PERSPECTIVE: THE RELATIONAL MIX AND THE GROWTH OF THE ENTREPRENEURIAL FIRM—A STUDY OF INTER-FIRM NETWORKS IN GERMANY

Christian Lechner, ESC Toulouse
Michael Dowling, University of Regensburg
Isabelle Welpe, University of Regensburg

Principal Topic

This research is concerned with the role of different network types (content) and growth of entrepreneurial firms. While networks are increasingly recognized as an entrepreneurial growth strategy, the focus of many studies is the size and range of networks. These studies have been useful in demonstrating the benefits of networks for the development of entrepreneurial firms but could hardly show how firms were able to build larger networks and to increase their transaction set (i.e. the number of customers and suppliers) leading finally to firm growth. We test a four stage model of entrepreneurial firm development based on different types of networks which we call the relational mix. We will show whether and how the change of the relational mix influences firm development and which types of networks are crucial to overcome growth barriers. The essence of the development model is that a firm’s relational mix has to change over time in order to enable firm growth. Despite previous research on entrepreneurial networks, interesting issues concerning the use of networks to promote growth remain to be addressed. Existing research at the macro-level neglects network composition. Research at the micro level does not investigate network development, while the context view considers network changes as mainly driven by external forces. Little is known about how firms use different types of external relations to grow. Our paper will analyze relationships between the relational mix and firm development. The hypotheses derive from recent research based on case studies.

Method

The empirical research is based on a survey sent to more than 500 venture capital backed, high-tech entrepreneurial firms in German speaking countries (Germany, Switzerland, Austria, Liechtenstein and Luxembourg) representing about 80 percent of the population. To ensure a high validity of the answers, the questionnaires were administered only to the CEOs and / or founders of the start-ups.

Results and Implications

The results about the influence of different relational mixes on firm development are presented. The dependent variable used in alternative models are sales and the transaction sets of firms. The independent measures in this study are different network types and degree of integration. We believe there are two main contributions of our research: It is an extensive international sample of high-tech firms in German speaking countries that tries to establish a link between networking activity and firm growth. And it is the first attempt to develop a conceptual model that links the relational mix of inter-firm networks to the growth of the entrepreneurial firm.

CONTACT: Christian Lechner, ESC Toulouse, The Toulouse Business School, Toulouse, France; (T) 33-561-294-923; (F) 33-561-194-994; c.lechner@esc-toulouse.fr