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Hua Deng

DBA Graduate - 2018

Thesis title

The effects of organizational Learning and social capital of entrepreneurial team on the performance of start-up firms

Supervisor(s)

Jie Yan
Purpose: Entrepreneurship has been considered as a critical driver of economic growth. An entrepreneurial act is viewed as a risky behavior because of the fierce market competition. Understanding the factors which contribute to the start-up performance is valuable. Drawing the renowned Exploration-Exploitation framework and marketing theory, this thesis attempts to investigate how organizational learning and the social capital of the start-up team jointly influence start-up performance. Design/methodology/approach: Based on the reviewing the gaps emerged in literatures, I proposed twelve hypotheses. A questionnaire survey was conducted to test the proposed hypotheses. I developed a questionnaire using existing matured measurement scales wherever possible. Two rounds of pre-tests were conducted to detect potential basis and potential problems in the design of the questionnaire. Using a convenience sampling strategy, I collected data from 165 start-up firms in Chongqing high-tech zone. The members of entrepreneurial team answered the questionnaires. The data was analyzed using smart PLS and the proposed hypotheses were tested using structural equation model. Findings: Ten out of twelve hypotheses were supported by the data. I was found that explorative learning and exploitative learning positively related to start-up performance. Background diversity of entrepreneurial teams, the size of entrepreneur’s personal networks, and the size of entrepreneur’s business networks e positively relate to explorative learning. Background diversity of top management negatively relates to exploitative learning. Market uncertainty positively moderates the relationship between explorative learning and start-up performance, and negatively moderates the relationship between exploitative learning and start-up performance. On the contrary, market competition negatively moderates the relationship between explorative learning and start-up performance, and positively moderates the relationship between exploitative learning and start-up performance. Research limitations/implications: First, the cross-sectional nature of the data may create doubts to the causality of the arguments. Second, the sample was drawn from China. Whether the findings hold within other cultural environment deserve further investigations. Third, the dependent variable, start-up performance, was measured using self-reported scales. The respondents may overestimate their financial performance. Practical implications: China is at the primary stage of economic transition, and there are tremendous opportunities for entrepreneurs to realize their aspirations. Understanding how entrepreneurs build their cumulative learning portfolios along their professional lifecycles interact with how they search for promising project in different market, is crucial for both policy makers and entrepreneurs. Originality/value: To the best of my knowledge, this thesis is among the first to investigate the relationship between organizational learning and start-up performance under different market characteristics (market uncertainty and market competition).Keywords: explorative learning; exploitative learning; social capital; start-up performance; market uncertainty; market competition; entrepreneurship