The Influence of Changes in Social Capital on Firm–Founding Activities

Abstract

This study examines how founders can manage changes in their network ties during firm founding. We find that an increase in tie strength is negatively associated with founding activities, whereas an increase in the number of ties is positively associated with founding activities. Furthermore, entrepreneurial intensity mitigates the negative relationship between an increase in tie strength and founding activities; and social competence reinforces the positive relationship between an increase in the number of ties and founding activities. Our study contributes to the social capital literature by theorizing and testing how changes in a founder's network structure can be beneficial to founding activities.