Entrepreneurs' personal network usage and the performance of young firms: evidence from an emerging market

Abstract

Purpose

While most extant research focused on different dimensions of the entrepreneurs’ social network such as the size and quality of the network, the focus of this paper is on the extent to which entrepreneurs utilize their personal network with suppliers, competitors, customers, and government officials to support the operations of their ventures. This paper also takes into account the effects of industry level determinants that can influence the relationship between entrepreneurs’ personal network usage and young firms’ performance.

Design/methodology/approach

The paper employs confirmatory factor analysis and moderated hierarchical multiple regressions on a sample of 246 young firms in Kuwait.

Findings

The results indicate that entrepreneurs' personal network usage is positively associated with young firms' performance. The results also reveal that industry dynamism strengthens this relationship, while in hostile industries the relationship between network usage and young firms' performance becomes weaker.

Originality/value

The present study provides insights into how the extent of utilization of an entrepreneur's personal network affects the firm's performance. Furthermore, by unpacking how industry dynamism and industry hostility influence the entrepreneurs' ability to reap benefits from their personal networks, this paper enriches the research on the role of industry factors in the performance of young firms.

Citation

Alnahedh, M. and Alrashdan, A. (2021), "Entrepreneurs' personal network usage and the performance of young firms: evidence from an emerging market", World Journal of Entrepreneurship, Management and Sustainable Development, Vol. 17 No. 4, pp. 711-728. https://doi.org/10.1108/WJEMSD-09-2020-0115