Excessive Ties In Entrepreneurship Can Hurt: How Excess Entrepreneurial Ties Bring Negative Effects To The Firm

Entrepreneurial ties are a critical resource for development and survival of entrepreneurial firms; however, the mechanism of how entrepreneurial ties affect entrepreneurial performance remains unclear. This study advances existing research on social ties and entrepreneurship through investigating how entrepreneurial ties exert a curvilinear impact on entrepreneurial performance via absorptive capacity, and the curvilinear effect of entrepreneurial ties is contingent on environmental complexity. The present study uses a dyadic dataset of 223 entrepreneurs from creativity industries in China to examine hypotheses. The results show that entrepreneurs' ties have an inverted U-shaped impact on entrepreneurial performance. We also partially find that this inverted U-shaped relationship is mediated by absorptive capacity. Finally, we also find that this inverted U-shaped relationship is steeper when environmental complexity is high, and this inverted U-shaped relationship turns into an almost positive linear when environmental complexity is low. Overall, these results contribute to a deeper understanding of how and when entrepreneurial ties lead to a curvilinear impact on firm outcomes.