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Network or Independent Business? Entrepreneurs' Human, Social and Financial Capital as Determinants of Mode of Entry
Author(s) -
Bastié Françoise,
Cussy Pascal,
Le Nadant AnneLaure
Publication year - 2016
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2709
Subject(s) - join (topology) , social capital , probit model , human capital , debt , business , probit , social network (sociolinguistics) , mode (computer interface) , finance , financial capital , economics , econometrics , market economy , sociology , political science , law , social science , mathematics , combinatorics , computer science , social media , operating system
When establishing a new business, entrepreneurs can decide to join a network of independent business partners rather than choose the alternative of independent business ownership. In this study, we use a probit model on a large database to study the human, social, and financial capital of French entrepreneurs who join franchising and comparable forms of networks. Results confirm that initial levels of human and social capital are significant determinants of network membership. We also show that an increase in the proportion of the project financed by debt increases the probability of joining a network. Copyright © 2014 John Wiley & Sons, Ltd.