How the Firm networks affect the foundation and development of NTBF: Empirical evidence on Hite and Hesterly Propositions

Abstract

<p> Network has drawn attention from different fields and its contributions on the businesses have been discussed; however, Hite and Hesterly (2001) propose that it is significant for companies to change from closed networks to dispersed networks as the firm grows. Similarly, scholars argue that firm network, development and resources are “co-evolved”. These authors further state that changing of networks are affected by (a) individual difference of entrepreneurs, (b) industrial differences for resources, and (c) difference in the compositional quality. Thus, this paper tests their propositions to see “why” it is essential to change networks and to pinpoint “what”, “when” and “how” the necessity is needed in the formation and development of New Technology Based Firms (NTBFs). To achieve the objectives, four case studies are developed and the empirical results show that the origin of firm network determines the necessity for changing networks, the quality of network member affects the changes but individual difference of technology-based entrepreneur may or may not affect the changes.</p>