Skip to main content
SpringerLink
Log in

Embeddedness or Over-Embeddedness? Women Entrepreneurs’ Networks and Their Influence on Business Performance

  • Original Article
  • Published:
The European Journal of Development Research Aims and scope Submit manuscript

Abstract

We analyse in what ways network embeddedness may influence the business performance of women entrepreneurs working in a socially constrained context. Data were collected through a survey sent to 292 women entrepreneurs engaged in handicraft businesses in Bangladesh. Results from multiple regression models show that, next to entrepreneurial orientation, financial capital and business experience, a small network is positively related, while medium-sized and large networks are negatively related, to performance. In-depth analysis reveals that a small bonding ties network is positively, while a medium-sized bonding ties network is negatively, and a large bonding ties network is not, statistically related to performance. Based on this, we assume that the networks of many women entrepreneurs may be over-embedded, because of too extensive connections with family and friends. Apparently, the over-embeddedness proposition of Uzzi (Am Sociol Rev 61:674–698, 1996) proves to be valid for women entrepreneurs operating under socially constrained circumstances in a developing country.

Résumé

Nous analysons de quelle manière l’encastrement dans un réseau social peut influer sur les performances commerciales des femmes entrepreneures travaillant dans un contexte de contrainte sociale. Les données sont collectées dans le cadre d’une enquête envoyée à 292 femmes entrepreneures engagées dans l’artisanat au Bangladesh. Les résultats issus de modèles de régression multiple montrent que, outre l’orientation entrepreneuriale, le capital financier, et l’expérience professionnelle, disposer d’un petit réseau est positivement lié à la performance commerciale, alors que les réseaux de taille moyenne et grande sont négativement liés à la performance. Une analyse approfondie révèle qu’un réseau de liaisons de petite taille est positivement relié à la performance, alors qu’un réseau de liaisons de taille moyenne y est inversement relié, et qu’un grand réseau de liaisons n’est pas statistiquement lié à la performance. Sur cette base, nous supposons que les réseaux de nombreuses femmes entrepreneures pourraient être trop encastrés, en raison de liens trop étroits avec la famille et les amis. Il semblerait que la proposition de sur-encastrement d’Uzzi (Am Sociol Rev 61:674–698, 1996) s’avère valable pour les femmes entrepreneures travaillant en situation de contrainte sociale dans un pays en développement.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Here defined as the business success assessed by using financial- and/or non-financial performance indicators (Venkatraman and Ramanujam 1986).

  2. Generally identified as the low- and middle-income economies (World-Bank 2014).

  3. Here defined as the women who are the initiators, owners and managers of businesses run at least for 1 year (Moore and Buttner 1997).

  4. A tie is strong if the relationship between two actors is durable, in that they have a frequent contact (at least twice a week), a high amount of emotional closeness and a long time of connection (Granovetter 1973).

  5. The organizations contacted were the government organizations: Bangladesh Small and Cottage Industries Corporation, Directorate of Women Affairs, Jatiya Mahila Sangstha; non-government organizations: World Vision and Bangladesh Rural Advancement Committee; commercial and specialised banks: National Bank and Grameen Bank; and other organizations: Bangladesh Women Chamber of Commerce and Industry, Trinamool Nari Unnayan Samity and Srijan Mohila Sangstha.

  6. The text of the survey is available upon request.

  7. Respondents generally mention fewer than seven people when they are asked to name important people for their business (Scholten et al. 2015).

  8. Systematic error variance commonly arises due to use of the same method (Lindell and Whitney 2001), (in our case, the survey).

  9. The details are available if required.

  10. Items: I plan ahead what I want to do, I always produce desirable products for clients, and I can easily predict the action of competitors and set my strategies accordingly.

  11. Item: I am good at managing financial risks.

  12. Item: I look for new connections to get access to raw materials, finance and new markets.

  13. Robustness of models: the VIF is below the threshold VIF (10) and the condition index is within limits (30), indicating no serious multicollinearity. The standardized residuals indicated by ZRE indicates that residuals are normally distributed. Moreover, the X2 value indicates constant variance of residuals because we cannot reject the proposition of constant variance at the 5% level of significance (Greene 2003). We can therefore consider our models to be robust.

  14. Same control variables of the previous models.

References

  • Al-Dajani, H., and S. Marlow. 2010. Impact of women’s home-based enterprise on family dynamics: Evidence from Jordan. International Small Business Journal 28 (5): 470–486.

    Article  Google Scholar 

  • Aldrich, H., and C. Zimmer. 1986. Entrepreneurship through social networks. In: D.L. Sexton and R.W. Smiler (eds) The Art and Science of Entrepreneurship. Cambridge, MA: Ballinger, pp. 3–23.

    Google Scholar 

  • Amine, L.S., and K.M. Staub. 2009. Women entrepreneurs in sub-Saharan Africa: An institutional theory analysis from a social marketing point of view. Entrepreneurship & Regional Development 21 (2): 183–211.

    Article  Google Scholar 

  • Arregle, J.L., et al. 2015. Family ties in entrepreneurs’ social networks andA new venture growth. Entrepreneurship Theory and Practice 39 (2): 313–344.

    Article  Google Scholar 

  • Bates, T. 1994. Social resources generated by group support networks may not be beneficial to Asian immigrant-owned small businesses. Social Forces 72 (3): 671–689.

    Article  Google Scholar 

  • Batjargal, B. 2007. Internet entrepreneurship: Social capital, human capital, and performance of Internet ventures in China. Research Policy 36 (5): 605–618.

    Article  Google Scholar 

  • Baum, J.A., T. Calabrese, and B.S. Silverman. 2000. Don’t go it alone: Alliance network composition and startups’ performance in Canadian biotechnology. Strategic Management Journal 21: 267–294.

    Article  Google Scholar 

  • Bliemel, M.J., and E.M. Maine. 2008. Network embeddedness as a predictor of performance for New Technology-Based Firms. International Journal of Technoentrepreneurship 1 (3): 313–341.

    Article  Google Scholar 

  • Brüderl, J., and P. Preisendörfer. 1998. Network support and the success of newly founded business. Small Business Economics 10 (3): 213–225.

    Article  Google Scholar 

  • Burt, R.S. 2000. The network structure of social capital. Research in Organizational Behavior 22: 345–423.

    Article  Google Scholar 

  • Coleman, S. 2007. The role of human and financial capital in the profitability and growth of women-owned small firms. Journal of Small Business Management 45 (3): 303–319.

    Article  Google Scholar 

  • Cooper, A.C., F.J. Gimeno-Gascon, and C.Y. Woo. 1994. Initial human and financial capital as predictors of new venture performance. Journal of Business Venturing 9 (5): 371–395.

    Article  Google Scholar 

  • Costello, A.B. 2009. Getting the most from your analysis. Pan 12 (2): 131–146.

    Google Scholar 

  • Davidsson, P., and B. Honig. 2003. The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing 18 (3): 301–331.

    Article  Google Scholar 

  • De Vita, L., M. Mari, and S. Poggesi. 2014. Women entrepreneurs in and from developing countries: Evidences from the literature. European Management Journal 32 (3): 451–460.

    Article  Google Scholar 

  • Dess, G.G., and R.B. Robinson. 1984. Measuring organizational performance in the absence of objective measures: The case of the privately-held firm and conglomerate business unit. Strategic Management Journal 5 (3): 265–273.

    Article  Google Scholar 

  • Dollinger, M.J. 1985. Environmental contacts and financial performance of the small firm. Journal of Small Business Management 23 (1): 24–30.

    Google Scholar 

  • Dollinger, M.J. 2005. Entrepreneurship: strategies and resources. Lombard: Marsh.

    Google Scholar 

  • Drinkwater, M. 2009. ’We are also human’: identity and power in gender relations. In: S. Hickey and D. Mitlin (eds) Rights-based approaches to development: exploring the potential and pitfalls. Sterling: Kumarian, pp. 145–164.

    Google Scholar 

  • Dubini, P., and H. Aldrich. 2002. Personal and extended networks are central to the entrepreneurial process, 217–228. Entrepreneurship: Critical perspectives on business and management.

    Google Scholar 

  • Eklinder-Frick, J., L.-T. Eriksson, and L. Hallén. 2011. Bridging and bonding forms of social capital in a regional strategic network. Industrial Marketing Management 40 (6): 994–1003.

    Article  Google Scholar 

  • Fuentes-Fuentes, M.M., A.M. Bojica, and M. Ruiz-Arroyo. 2015. Entrepreneurial orientation and knowledge acquisition: Effects on performance in the specific context of women-owned firms. International Entrepreneurship and Management Journal 11 (3): 695–717.

    Article  Google Scholar 

  • Gargiulo, M., and M. Benassi. 1999. The dark side of social capital. New York: Springer.

    Book  Google Scholar 

  • Gargiulo, M., and M. Benassi. 2000. Trapped in your own net? Network cohesion, structural holes, and the adaptation of social capital. Organization Science 11 (2): 183–196.

    Article  Google Scholar 

  • Gittell, R., and A. Vidal. 1998. Community organizing: Building social capital as a development strategy. Thousand Oaks: Sage.

    Google Scholar 

  • Glonti, K., et al. 2016. Psychosocial environment: definitions, measures and associations with weight status—A systematic review. Obesity Reviews 17 (S1): 81–95.

    Article  Google Scholar 

  • Granovetter, M. 1973. The strength of weak ties. American Journal of Sociology 78 (6): 1360–1380.

    Google Scholar 

  • Granovetter, M. 1985. Economic action and social structure: The problem of embeddedness. American Journal of Sociology 91 (3): 481–510.

    Article  Google Scholar 

  • Granovetter, M. 1992. Problems of explanation in economic sociology. Networks and Organizations: Structure, Form, and Action 25: 56.

    Google Scholar 

  • Granovetter, M. 1995. The economic sociology of firms and entrepreneurs. In: A. Portes (ed) The economic sociology of immigration. New York: Russell Sage Foundation, pp. 28–165.

    Google Scholar 

  • Greene, W.H. 2003. Econometric analysis. Upper Saddle River: Pearson.

    Google Scholar 

  • Greve, A., and J.W. Salaff. 2003. Social networks and entrepreneurship. Entrepreneurship theory and practice 28 (1): 1–22.

    Article  Google Scholar 

  • Gulati, R. 1998. Alliance and networks. Strategic Management Journal 19 (4): 293–317.

    Article  Google Scholar 

  • Hampton, A., S. Cooper, and P. Mcgowan. 2009. Female entrepreneurial networks and networking activity in technology-based ventures an exploratory study. International Small Business Journal 27 (2): 193–214.

    Article  Google Scholar 

  • Hawkins, R.L., and K. Maurer. 2010. Bonding, bridging and linking: How social capital operated in New Orleans following Hurricane Katrina. British Journal of Social Work 40 (6): 1777–1793.

    Article  Google Scholar 

  • Hite, J.M., and W.S. Hesterly. 2001. The evolution of firm networks: From emergence to early growth of the firm. Strategic Management Journal 22 (3): 275–286.

    Article  Google Scholar 

  • Hoang, H., and B. Antoncic. 2003. Network-based research in entrepreneurship: A critical review. Journal of Business Venturing 18 (2): 165–187.

    Article  Google Scholar 

  • Hoang, H., and A. Yi. 2015. Network-based research in entrepreneurship: A decade in review. Foundations and Trends (R) in Entrepreneurship 11 (1): 1–54.

    Article  Google Scholar 

  • Hsueh, J.-T., N.-P. Lin, and H.-C. Li. 2010. The effects of network embeddedness on service innovation performance. The Service Industries Journal 30 (10): 1723–1736.

    Article  Google Scholar 

  • Hughes, M., and R.E. Morgan. 2007. Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth. Industrial Marketing Management 36 (5): 651–661.

    Article  Google Scholar 

  • Inkpen, A.C., and E.W. Tsang. 2005. Social capital, networks, and knowledge transfer. Academy of Management Review 30 (1): 146–165.

    Article  Google Scholar 

  • Inmyxai, S., and Y. Takahashi. 2010. Performance contrast and its determinants between male and female headed firms in Lao MSMEs. International Journal of business and management 5 (4): 37.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • Jack, S.L., and A.R. Anderson. 2002. The effects of embeddedness on the entrepreneurial process. Journal of Business Venturing 17 (5): 467–487.

    Article  Google Scholar 

  • Jamali, D. 2009. Constraints and opportunities facing women entrepreneurs in developing countries: A relational perspective. Gender in Management: An International Journal 24 (4): 232–251.

    Article  Google Scholar 

  • Kabir, M., and X. Huo. 2011. Advancement of rural poor women through small entrepreneurship development: The case of Bangladesh. International Journal of Business and Management 6 (9): 134–140.

    Article  Google Scholar 

  • Kantor, P. 2005. Determinants of women’s microenterprise success in Ahmedabad, India: Empowerment and economics. Feminist Economics 11 (3): 63–83.

    Article  Google Scholar 

  • Klyver, K., and D. Foley. 2012. Networking and culture in entrepreneurship. Entrepreneurship & Regional Development 24 (7–8): 561–588.

    Article  Google Scholar 

  • Kraus, S., et al. 2012. Entrepreneurial orientation and the business performance of SMEs: A quantitative study from the Netherlands. Review of Managerial Science 6 (2): 161–182.

    Article  Google Scholar 

  • Kreiser, P.M., P.C. Patel, and J.O. Fiet. 2013. The influence of changes in social capital on firm-founding activities. Entrepreneurship Theory and Practice 37 (3): 539–568.

    Article  Google Scholar 

  • Kuada, J. 2009. Gender, social networks, and entrepreneurship in Ghana. Journal of African Business 10 (1): 85–103.

    Article  Google Scholar 

  • Larson, A., and J.A. Starr. 1993. A network model of organization formation. Entrepreneurship: Theory and Practice 17 (2): 5–16.

    Google Scholar 

  • Lee, C., K. Lee, and J.M. Pennings. 2001. Internal capabilities, external networks, and performance: a study on technology-based ventures. Strategic Management Journal 22 (6–7): 615–640.

    Article  Google Scholar 

  • Lin, N. 2008. A network theory of social capital. The Handbook Of Social Capital 50: 69.

    Google Scholar 

  • Lindell, M.K., and D.J. Whitney. 2001. Accounting for common method variance in cross-sectional research designs. Journal of Applied Psychology 86 (1): 114.

    Article  Google Scholar 

  • Lumpkin, G.T., and G.G. Dess. 1996. Clarifying the entrepreneurial orientation construct and linking it to performance. The Academy of Management Review 21 (1): 135–172.

    Article  Google Scholar 

  • Maas, J., et al. 2014. Bridging the disconnect: How network creation facilitates female Bangladeshi entrepreneurship. International Entrepreneurship and Management Journal 10 (3): 1–14.

    Article  Google Scholar 

  • Mair, J., and I. Marti. 2009. Entrepreneurship in and around institutional voids: A case study from Bangladesh. Journal of Business Venturing 24 (5): 419–435.

    Article  Google Scholar 

  • Mayoux, L. 2001. Tackling the down side: Social capital, women’s empowerment and micro-finance in Cameroon. Development and change 32 (3): 435–464.

    Article  Google Scholar 

  • McEvily, B., and A. Zaheer. 1999. Bridging ties: A source of firm heterogeneity in competitive capabilities. Strategic Management Journal 20 (12): 1133–1156.

    Article  Google Scholar 

  • Miller, D. 1983. The correlates of entrepreneurship in three types of firms. Management Science 29 (7): 770–791.

    Article  Google Scholar 

  • Moore, D.P., and E.H. Buttner. 1997. Women entrepreneurs: Moving beyond the glass ceiling. Thousand Oaks: Sage.

    Google Scholar 

  • Mozumdar, L. et al. (2016). Influence of Entrepreneurial Orientation on Women’s Business Performance in Bangladesh’. The 76th Annual Meeting of the Academy of Management, 2016 Anaheim, California.

  • Poggesi, S., M. Mari, and L. Vita. 2015. What’s new in female entrepreneurship research? Answers from the literature. International Entrepreneurship and Management Journal. https://doi.org/10.1007/s11365-015-0364-5.

    Article  Google Scholar 

  • Poon, J.P.H., D.T. Thai, and D. Naybor. 2012. Social capital and female entrepreneurship in rural regions: Evidence from Vietnam. Applied Geography 35 (1–2): 308–315.

    Article  Google Scholar 

  • Portes, A. 2000. Social capital: Its origins and applications in modern sociology. In: Eric L. Lesser (ed) Knowledge and social capital. Boston: Butterworth-Heinemann, pp. 43–67.

    Chapter  Google Scholar 

  • Putzel, J. 1997. Policy arena: Accounting for the ‘dark side’of social capital: reading Robert Putnam on democracy. Journal of International Development 9 (7): 939–949.

    Article  Google Scholar 

  • Rabbani, G., and M.S. Chowdhury. 2013. Policies and institutional supports for women entrepreneurship development in Bangladesh: Achievements and challenges. International Journal of Research in Business and Social Science 2 (1): 31.

    Google Scholar 

  • Rauch, A., et al. 2009. Entrepreneurial orientation and business performance: An assessment of past research and suggestions for the future. Entrepreneurship Theory and Practice 33 (3): 761–787.

    Article  Google Scholar 

  • Raz, O., and P.A. Gloor. 2007. Size really matters-new insights for start-ups’ survival. Management Science 53 (2): 169–177.

    Article  Google Scholar 

  • Renzulli, L.A., H. Aldrich, and J. Moody. 2000. Family matters: Gender, networks, and entrepreneurial outcomes. Social Forces 79 (2): 523–546.

    Article  Google Scholar 

  • Rodríguez-Gutiérrez, M.J., P. Moreno, and P. Tejada. 2015. Entrepreneurial orientation and performance of SMEs in the services industry. Journal of Organizational Change Management 28 (2): 194–212.

    Article  Google Scholar 

  • Roomi, M.A., and P. Harrison. 2010. Behind the veil: Women-only entrepreneurship training in Pakistan. International Journal of Gender and Entrepreneurship 2 (2): 150–172.

    Article  Google Scholar 

  • Rutashobya, L.K., I.S. Allan, and K. Nilsson. 2009. Gender, social networks, and entrepreneurial outcomes in Tanzania. Journal of African Business 10 (1): 67–83.

    Article  Google Scholar 

  • Sarkar, M., R. Echambadi, and J.S. Harrison. 2001. Research note: Alliance entrepreneurship and firm market performance. Strategic Management Journal 22 (6–7): 701–711.

    Article  Google Scholar 

  • Scholten, V., et al. 2015. Bridging ties and the role of research and start-up experience on the early growth of Dutch academic spin-offs. Technovation 45–46: 40–51.

    Article  Google Scholar 

  • Slotte-Kock, S., and N. Coviello. 2010. Entrepreneurship research on network processes: A review and ways forward. Entrepreneurship Theory and Practice 34 (1): 31–57.

    Article  Google Scholar 

  • Smith-Hunter, A.E., and J. Leone. 2010. Evidence on the characteristics of women entrepreneurs in Brazil: An empirical analysis. International Journal of Management and Marketing Research 3 (1): 85–102.

    Google Scholar 

  • Stam, W., and T. Elfring. 2008. Entrepreneurial orientation and new venture performance: The moderating role of intra- and extra-industry social capital. Academy of Management Journal 51 (1): 97–111.

    Article  Google Scholar 

  • Szreter, S., and M. Woolcock. 2004. Health by association? Social capital, social theory, and the political economy of public health. International Journal of Epidemiology 33 (4): 650–667.

    Article  Google Scholar 

  • Uzzi, B. 1996. The sources and consequences of embeddedness for the economic performance of organizations: The network effect. American Sociological Review 61: 674–698.

    Article  Google Scholar 

  • Uzzi, B. 1997. Social structure and competition in interfirm networks: The paradox of embeddedness. Administrative Science Quarterly 42: 35–67.

    Article  Google Scholar 

  • Venkatraman, N., and V. Ramanujam. 1986. Measurement of business performance in strategy research: A comparison of approaches. Academy of Management Review 11 (4): 801–814.

    Article  Google Scholar 

  • Verhees, F.J., T. Lans, and J.A. Verstegen. 2012. The influence of market and entrepreneurial orientation on strategic marketing choices: the cases of Dutch farmers and horticultural growers. Journal on Chain and Network Science 12 (2): 167–179.

    Article  Google Scholar 

  • Wall, T.D., et al. 2004. On the validity of subjective measures of company performance. Personnel Psychology 57 (1): 95–118.

    Article  Google Scholar 

  • Welter, F., and D. Smallbone. 2011. Institutional perspectives on entrepreneurial behavior in challenging environments. Journal of Small Business Management 49 (1): 107–125.

    Article  Google Scholar 

  • Woolcock, M. 1998. Social capital and economic development: Toward a theoretical synthesis and policy framework. Theory and Society 27 (2): 151–208.

    Article  Google Scholar 

  • Woolcock, M. 2001. The place of social capital in understanding social and economic outcomes. Canadian Journal of Policy Research 2 (1): 11–17.

    Google Scholar 

  • World-Bank (2014) ‘http://data.worldbank.org/about/country-and-lending-groups%23Lower_middle_income. Accessed 15 March 2016.

  • Xie, X., and J. Lv. 2016. Social networks of female tech-entrepreneurs and new venture performance: The moderating effects of entrepreneurial alertness and gender discrimination. International Entrepreneurship and Management Journal 12 (4): 963–983.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Rural Sociology, Bangladesh Agricultural University, Mymensingh, 2202, Bangladesh

    Lavlu Mozumdar

  2. Business Management and Organization, Wageningen University, Hollandseweg 1, 6707 KN, Wageningen, The Netherlands

    Lavlu Mozumdar, Geoffrey Hagelaar, Valentina C. Materia, S. W. F. Omta & Gerben van der Velde

  3. Department of Agricultural Statistics, Bangladesh Agricultural University, Mymensingh, 2202, Bangladesh

    Mohammad Amirul Islam

Authors
  1. Lavlu Mozumdar
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Geoffrey Hagelaar
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Valentina C. Materia
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. S. W. F. Omta
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. Mohammad Amirul Islam
    View author publications

    You can also search for this author in PubMed Google Scholar

  6. Gerben van der Velde
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Lavlu Mozumdar.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Mozumdar, L., Hagelaar, G., Materia, V.C. et al. Embeddedness or Over-Embeddedness? Women Entrepreneurs’ Networks and Their Influence on Business Performance. Eur J Dev Res 31, 1449–1469 (2019). https://doi.org/10.1057/s41287-019-00217-3

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/s41287-019-00217-3

Keywords

Search

Navigation