Abstract
Entrepreneurial opportunity discovery (EODI) and opportunity exploitation (EOEX) are two critical entrepreneurial activities which heavily depend on external social network. The present study provided a nuanced investigation on the roles of affective and cognitive trust in the relationship between network ties (strong and weak ties) and opportunity discovery and exploitation. We examined the hypothesized relationships using longitudinal data collected from a sample of 207 nascent entrepreneurs in China. Our results showed that affective trust mediated the positive effects of network ties on EODI and EOEX. Further, cognitive trust moderated their relationships, that is, high level of cognitive trust enhance the positive relationship between weak ties and EODI as well as the positive relationship between strong ties and EOEX. Theoretical and practical implications are discussed.
Similar content being viewed by others
References
Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting interactions. Newsbury Park: Sage Publications, Inc.
Anderson, A. R., & Jack, S. L. (2002). The articulation of social capital in entrepreneurial networks: a glue or a lubricant? Entrepreneurship & Regional Development, 14(3), 193–210.
Arenius, P., & Clercq, D. D. (2005). A network-based approach on opportunity recognition. Small Business Economics, 24(3), 249–265.
Batjargal, B., & Liu, M. (2004). Entrepreneurs’ access to private equity in China: The role of social capital. Organization Science, 15(2), 159–172.
Birley, S. (1985). The role of networks in the entrepreneurial process. Journal of Business Venturing, 1(1), 107–117.
Blau, P. M. (1964). Exchange and power in social life. New Brunswick: Transaction Publishers.
Brüderl, J., & Preisendörfer, P. (1998). Network support and the success of newly founded business. Small Business Economics, 10(3), 213–225.
Brunetto, Y., & Farr-Wharton, R. (2007). The moderating role of trust in sme owner/managers’ decision‐making about collaboration. Journal of Small Business Management, 45(3), 362–387.
Burt, R. S. (1992). Structural holes: the social structure of competition. Cambridge: Harvard Univ Pre.
Chen, X.-P., & Chen, C. (2004). On the intricacies of the chinese guanxi: A process model of guanxi development. Asia Pacific Journal of Management, 21(3), 305–324.
Chua, R. Y. J., Ingram, P., & Morris, M. W. (2008). From the head and the heart: Locating cognition- and affect-based trust in managers’ professional networks. Academy of Management Journal, 51(3), 436–452.
Colquitt, J. A., Scott, B. A., & LePine, J. A. (2007). Trust, trustworthiness, and trust propensity: A meta-analytic test of their unique relationships with risk taking and job performance. Journal of Applied Psychology, 92(4), 909–927.
Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing, 18(3), 301–331.
Dimov, D. (2007). Beyond the single‐person, single‐insight attribution in understanding entrepreneurial opportunities. Entrepreneurship: Theory and Practice, 31(5), 713–731.
Dimov, D. (2010). Nascent entrepreneurs and venture emergence: Opportunity confidence, human capital, and early planning. Journal of Management Studies, 47(6), 1123–1153.
Doty, D. H., & Glick, W. H. (1998). Common methods bias: does common methods variance really bias results? Organizational Research Methods, 1(4), 374–406.
Farmer, S. M., Yao, X., & Kung‐Mcintyre, K. (2011). The behavioral impact of entrepreneur identity aspiration and prior entrepreneurial experience. Entrepreneurship: Theory and Practice, 35(2), 245–273.
Foo, M. D. (2011). Emotions and entrepreneurial opportunity evaluation. Entrepreneurship: Theory and Practice, 35(2), 375–393.
Fuentes, M. D. M. F., Arroyo, M. R., Bojica, A. M., & Pérez, V. F. (2010). Prior knowledge and social networks in the exploitation of entrepreneurial opportunities. International Entrepreneurship and Management Journal, 6(4), 481–501.
Gartner, W. B. (1988). Who is an entrepreneur? Is the wrong question. American Journal of Small Business, 12(4), 11–32.
George, J. M., & Brief, A. P. (1992). Feeling good-doing good: a conceptual analysis of the mood at work-organizational spontaneity relationship. Psychological Bulletin, 112(2), 310.
Granovetter, M. S. (1973). The strength of weak ties. American Journal of Sociology, 1360–1380.
Grégoire, D. A., Barr, P. S., & Shepherd, D. A. (2010). Cognitive processes of opportunity recognition: The role of structural alignment. Organization Science, 21(2), 413–431.
Greve, A., & Salaff, J. W. (2003). Social networks and entrepreneurship. Entrepreneurship: Theory and Practice, 28(1), 1–22.
Gulati, R., & Higgins, M. C. (2003). Which ties matter when? The contingent effects of interorganizational partnerships on IPO success. Strategic Management Journal, 24(2), 127–144.
Hansen, M. T. (1999). The search-transfer problem: The role of weak ties in sharing knowledge across organization subunits. Administrative Science Quarterly, 44(1), 82–111.
Hmieleski, K. M., & Baron, R. A. (2008). Regulatory focus and new venture performance: A study of entrepreneurial opportunity exploitation under conditions of risk versus uncertainty. Strategic Entrepreneurship Journal, 2(4), 285–299.
Hoang, H., & Antoncic, B. (2003). Network-based research in entrepreneurship: A critical review. Journal of Business Venturing, 18(2), 165–187.
Holste, J. S., & Fields, D. (2005). The relationship of affect and cognition based trust with sharing and use of tacit knowledge. Academy of Management Proceedings, 2005(1), B1–B6.
Isen, A. M., & Baron, R. A. (1991). Positive affect as a factor in organizational-behavior. Research in Organizational Behavior, 13, 1–53.
Jack, S. L. (2005). The role, use and activation of strong and weak network ties: A qualitative analysis. Journal of Management Studies, 42(6), 1233–1259.
Johnson, D., & Grayson, K. (2005). Cognitive and affective trust in service relationships. Journal of Business Research, 58(4), 500–507.
Johnson, J. L., Cullen, J. B., Sakano, T., & Takenouchi, H. (1996). Setting the stage for trust and strategic integration in Japanese-U.S. Cooperative Alliances. Journal of International Business Studies, 27(5), 981–1004.
Kotabe, M., Martin, X., & Domoto, H. (2003). Gaining from vertical partnerships: knowledge transfer, relationship duration, and supplier performance improvement in the US and Japanese automotive industries. Strategic Management Journal, 24(4), 293–316.
Larson, A. (1992). Network dyads in entrepreneurial settings: A study of the governance of exchange relationships. Administrative Science Quarterly, 37(1), 76–104.
Levin, D. Z., & Cross, R. (2004). The strength of weak ties you can trust: The mediating role of trust in effective knowledge transfer. Management Science, 50(11), 1477–1490.
Levin, D. Z., Whitener, E. M., & Cross, R. (2006). Perceived trustworthiness of knowledge sources: the moderating impact of relationship length. Journal of Applied Psychology, 91(5), 1163.
Lewick, R., & Bunker, B. B. C. (1996). Developing and maintaining trust in work relationships. Trust in Organizations: Frontiers of Theory and Reach, 114–139
Lewis, J. D., & Weigert, A. (1985). Trust as a social reality. Social Forces, 63(4), 967–985.
Littunen, H. (2000). Networks and local environmental characteristics in the survival of new firms. Small Business Economics, 15(1), 59–71.
Luhmann, N. (1979). Trust and power : two works by Niklas Luhmann. Chichester: Wiley.
Marsden, P. V. (1990). Network data and measurement. Annual Review of Sociology, 16, 435–463.
Maurer, I., & Ebers, M. (2006). Dynamics of social capital and their performance implications: Lessons from biotechnology start-ups. Administrative Science Quarterly, 51(2), 262.
Mayer, R. C., & Davis, J. H. (1999). The effect of the performance appraisal system on trust for management: A field quasi-experiment. Journal of Applied Psychology, 84(1), 123.
Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An integrative model of organizational trust. Academy of Management Review, 20(3), 709–734.
McAllister, D. J. (1995). Affect- and cognition-based trust as foundations for interpersonal cooperation in organizations. Academy of Management Journal, 38(1), 24–59.
McEvily, B., & Zaheer, A. (1999). Bridging ties: A source of firm heterogeneity in competitive capabilities. Strategic Management Journal, 20(12), 1133–1156.
Meyerson, D., Weick, K. E., & Kramer, R. M. (1996). Swift trust and temporary groups. Trust in Organizations: Frontiers of Theory and Research, 166, 195.
Morrison, E. W. (2002). Newcomers’ relationships: The role of social network ties during socialization. Academy of Management Journal, 45(6), 1149–1160.
Ng, K.-Y., & Chua, R. Y. J. (2006). Do I contribute more when I trust more? Differential effects of cognition- and affect-based trust. Management and Organization Review, 2(1), 43–66.
Nicolaou, N., Shane, S., Cherkas, L., & Spector, T. D. (2009). Opportunity recognition and the tendency to be an entrepreneur: A bivariate genetics perspective. Organizational Behavior and Human Decision Processes, 110(2), 108–117.
Ozgen, E., & Baron, R. A. (2007). Social sources of information in opportunity recognition: Effects of mentors, industry networks, and professional forums. Journal of Business Venturing, 22(2), 174–192.
Patel, P. C., & Terjesen, S. (2011). Complementary effects of network range and tie strength in enhancing transnational venture performance. Strategic Entrepreneurship Journal, 5(1), 58–80.
Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879.
Prasad, E. (2004). China’s growth and integration into the world economy: Prospects and challenges (Vol. 232): Intl Monetary Fund.
Reagans, R., & Zuckerman, E. W. (2001). Networks, diversity, and productivity: The social capital of corporate R&D teams. Organization Science, 12(4), 502–517.
Ruef, M. (2002). Strong ties, weak ties and islands: structural and cultural predictors of organizational innovation. Industrial and Corporate Change, 11(3), 427–449.
Schwarz, N. (1990). Feelings as information: informational and motivational functions of affective states. New York: Guilford Press.
Sequeira, J., Mueller, S. L., & Mcgee, J. E. (2007). The influence of social ties and self-efficacy in forming entrepreneurial intentions and motivating nascent behavior. Journal of Developmental Entrepreneurship, 12(3), 275.
Shane, S., & Cable, D. (2002). Network ties, reputation, and the financing of new ventures. Management Science, 48(3), 364–381.
Shane, S., & Eckhardt, J. (2005). The Individual-opportunity nexus. In Z. Acs & D. Audretsch (Eds.), Handbook of entrepreneurship research (Vol. 1, pp. 161–191): Springer US.
Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217–226.
Singh, R., Hills, G. E., Hybels, R. C., & Lumpkin, G. (1999). Opportunity recognition through social network characteristics of entrepreneurs. Frontiers of Entrepreneurship Research, 228–241.
Smith, D. A., & Lohrke, F. T. (2008). Entrepreneurial network development: Trusting in the process. Journal of Business Research, 61(4), 315–322.
Stuart, T. E., Hoang, H., & Hybels, R. C. (1999). Interorganizational endorsements and the performance of entrepreneurial ventures. Administrative Science Quarterly, 44(2), 315–349.
Tiwana, A. (2008). Do bridging ties complement strong ties? An empirical examination of alliance ambidexterity. Strategic Management Journal, 29(3), 251–272.
Tsai, W. (2001). Knowledge transfer in intraorganizational networks: Effects of network position and absorptive capacity on business unit innovation and performance. Academy of Management Journal, 44(5), 996–1004.
Turner, J. C., Hogg, M. A., Oakes, P. J., Reicher, S. D., & Wetherell, M. S. (1987). Rediscovering the social group: A self-categorization theory. Oxford: Basil Blackwell.
Tyler, T. R. (1994). Psychological models of the justice motive: Antecedents of distributive and procedural justice. Journal of Personality and Social Psychology, 67(5), 850.
Venkatraman, S. (1997). The distinctive domain of entrepreneurship research. Advances in Entrepreneurship, Firm Emergence and Growth, 3, 119–138.
Wank, D. L. (2001). Commodifying communism: business, trust, and politics in a Chinese city (Vol. 14): Cambridge Univ Pr.
Webber, S. S. (2008). Development of cognitive and affective trust in teams a longitudinal study. Small Group Research, 39(6), 746–769.
Welter, F. (2012). All you need is trust? A critical review of the trust and entrepreneurship literature. International Small Business Journal, 30(3), 193–212.
Welter, F., & Smallbone, D. (2006). Exploring the role of trust in entrepreneurial activity. Entrepreneurship: Theory and Practice, 30(4), 465–475.
Wilson, J. M., Straus, S. G., & McEvily, B. (2006). All in due time: The development of trust in computer-mediated and face-to-face teams. Organizational Behavior and Human Decision Processes, 99(1), 16–33.
Wu, W., & Leung, A. (2005). Does a micro–macro link exist between managerial value of reciprocity, social capital and firm performance? The case of SMEs in China. Asia Pacific Journal of Management, 22(4), 445–463.
Yang, J. Y., & Li, J. (2008). The development of entrepreneurship in China. Asia Pacific Journal of Management, 25(2), 335–359.
Acknowledgments
This research work is supported by the National Natural Sciences Foundation of China (71372064, 71221061), by the national science foundation of Hunan Province Project (2015JJ1018).
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Ren, S., Shu, R., Bao, Y. et al. Linking network ties to entrepreneurial opportunity discovery and exploitation: the role of affective and cognitive trust. Int Entrep Manag J 12, 465–485 (2016). https://doi.org/10.1007/s11365-014-0350-3
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11365-014-0350-3