Empirical analysis of the effect of Japanese university spinoffs' social networks on their performance

Entrepreneurial firms are characterized as liability of smallness and liability of newness. University spinoff, regarded as one kind of entrepreneurial firms, also lacks internal capital such as financial capital and human capital. Therefore, it is crucial for university spinoffs to utilize external capital, especially social capital that can bring them important resources. In this study, using data of Japanese university spinoffs, we empirically examine the effect of university spinoffs' external advice networks on their performance. We focus on nonredundancy in their networks and the influence of the strength of ties in the business aspect and the private aspect to nonredundant contacts. Our results show that nonredundancy in university spinoffs' networks effects on their performance positively and the impact is enhanced by tie closeness as business relationships and tie weakness as private relationships. Thus, this research provides not only the insight about university spinoff's performance but also an additional perspective in social network theory by adopting the interaction between structural and relational embeddedness.