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The entrepreneurial process and online social networks: forecasting survival rate

Abstract

To launch a new business, entrepreneurs search for information and resources through their networks. We are concerned with collaboration among entrepreneurs with a network, and with the impact this has on new venture survival. Using entrepreneurs’ network data extracted from their respective online social networks, our paper develops a simulation model of the entrepreneurial process and its outcomes in terms of growth and survival. Findings from 273 entrepreneurs reveal that initial wealth at start-up, network density, and time to first collaboration have an impact on the probability of survival. We show that using numerical simulation, and based on one’s social network, the survival time of a start-up can be forecasted.

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Funding

This paper is supported by the National Natural Science Foundation of China (No. 71874068), Youth Foundation of Humanities and Social Sciences, Ministry of Education of China (No. 17YJC790129), and Jilin Province Science and Technology Development Plan Project (20180418128FG).

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Correspondence to Yang Song.

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Song, Y., Dana, L.P. & Berger, R. The entrepreneurial process and online social networks: forecasting survival rate. Small Bus Econ 56, 1171–1190 (2021). https://doi.org/10.1007/s11187-019-00261-7

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Keywords

  • Entrepreneurial process
  • Start-up
  • Social capital
  • Networks
  • Simulation
  • Survival rate

JEL Classifications

  • L26
  • M13
  • C15