Antecedents of entrepreneurial networking behavior and its impact on business performance - a systematic literature review

1. Introduction

The start-up ecosystem in India is the third largest in the world after the USA and China (Economic Survey 2022-2023), and the number of start-ups increased significantly over the decade with the support of several government initiatives such as streamlined procedures, the granting of tax breaks, access to affordable internet services, and an enormous domestic market. However, 90% of start-ups fail within the first five years as a consequence of a lack of innovation, dynamism, or poor product-market fit, lack of leadership, skills, or expertise, inadequate funds, or even an absence of mentorship (Kalyanasundaram, 2018; Kalyanasundaram et al., 2020). In this scenario, the social networking of an entrepreneur can lead his or her business to the next level.

Social networking is crucial for connecting people in the age of social media and for gathering information, resources, and knowledge. Through networking, people and organizations can interact with others in the sector, exchange knowledge, and discover fresh perspectives (Gloor et al., 2018). Additionally, it might lead to prospects for funding, partnerships, and employment. Attending conferences, taking part in business events, joining professional groups, and making connections on social networking sites such as LinkedIn are just a few ways to build a network. It is important to develop and maintain relationships over time since networking involves more than just making connections, it is also about building long-lasting relationships. While performing social networking, entrepreneurs are often driven by their goals and aspirations, and it is the motivational factor that fuels their determination to succeed (Abdallah et al., 2022). These factors can include personal ambition, a desire for financial success, the need for autonomy and independence, and the gratification derived from overcoming challenges. Research has shown that highly motivated entrepreneurs tend to have higher levels of persistence, resilience, and commitment to their business goals (Murnieks et al., 2020). Similarly, understanding the role of the personality of an entrepreneur for social networking also plays a crucial role in determining business performance (Di Stefano et al., 2023; Gloor et al., 2018). Research has shown that certain personality traits have a significant impact on an entrepreneur’s ability to succeed and perform well in their business ventures. These personality factors include traits such as extraversion, conscientiousness, openness to experience, emotional stability, and risk propensity (Martin et al., 2016).

The current review attempts to learn more about the antecedents of entrepreneurial networking behavior and its impact on Start-up performance. It also provides some suggestions for further study in this area. Many scholars have conducted systematic reviews of evidence on networking behavior, but a systematic review of the antecedents of networking behavior such as – motivational factors and personality factors, and their effects on business performance has not been conducted. Therefore, it is vital to examine existing research on the causes and consequences of networking behavior. The flow of this review article includes the literature review and its theoretical support, the methods used to identify all relevant articles, findings followed by discussions, suggestions for future research, and conclusions.

2. Literature review

3. Methods

3.1 Research design

This systematic review of quantitative and qualitative studies was designed and implemented following the PRISMA framework (Moher et al., 2009). The researchers used the PRISMA model (Preferred Reporting Items for Systematic Reviews and Meta-Analysis) to establish the structure of the study selection for review. After removing duplicates, 3879 publications were retrieved from the SCOPUS electronic databases. Initially, the titles and abstracts of all studies were screened and assessed against the inclusion and exclusion criteria to determine which were relevant to the review. Overall, 32 out of 230 studies were included in the analysis.

The selection process is illustrated in the PRISMA flow chart presented in Figure 1.

Figure 1. PRISMA flowchart.

4. Overview of the reviewed studies

Table 1 shows the selected articles considered for the literature review in table format (refer to extended data table 1).

5. Findings and discussion

Most of the studies used a constructivist paradigmatic approach that was congruent with the methodologies used including case studies, narrative inquiry, ethnography, mixed-methods, and grounded theory. The majority of the studies have used a quantitative data approach to examine and comprehend entrepreneurs’ perceptions and actual networking behavior. The findings of these studies are significant for various reasons. It was found that most of the studies have been carried out in countries namely India, Slovenia, Uganda, Croatia, Germany, Portugal, and China. This may be because of the promotion of entrepreneurship as a tool for economic growth and unemployment reduction in developing nations, where entrepreneurs can access government incentives for their businesses to grow. The summary of review is given in Table 1.

Furthermore, it was found that the majority of studies used self-rating techniques, such as questionnaires which would have been biased toward some entrepreneurs because they might have given more weight to their positive attributes than to those that were essential for business success. Additionally, regarding personality as an antecedent to networking behavior, the majority of studies have examined only the Big Five traits to date, completely ignoring additional personality factors such as MBTI and nonpersonality factors namely cognition, knowledge, skills, and intelligence. The study sample sizes ranged from 50 to 3384 people. Critical events, content analysis, mixed approaches, embedded case studies, virtual experimental procedures, and in-depth personal interviews were all used in these studies, in addition to surveys. A small percentage of studies have used mixed techniques, with the majority of studies conducting only quantitative or qualitative research. The use of the mixed methods approach, which analyzes the evidence based on the current situation, may therefore be essential.

The process of building, cultivating, and mobilizing network links is known as networking. It includes the exchange of information, money, strength, and communication that occurs as a result of these ties (Carter and Evans, 2006). Networks help in seeking information and advice, enriching internal resources, competing in flexible marketplaces, and creating advanced products (Wiklund et al., 2009). Carter and Evans (2006) reported that large and complicated networks are more likely to provide business potential, increase problem-solving opportunities, and provide businesses with a greater chance of succeeding. Connecting with like-minded people, obtaining access to expertise and information, increasing learning, and building a sense of belonging and legitimacy are all major benefits of formal networking. Those who are interested in the success of a business use many networking practices (Weber, 2007).

Motivational factors are closely related to business growth and are consistent with prior research in social psychology and applied psychology (Shane et al., 2003). According to Sharafizad (2019), networking should not be viewed as a simple stand-alone commercial activity, but rather as a complicated process that is influenced by the entrepreneur’s perceptions, and these are the reasons for founding the company first. The need for achievement is also considered the main motivation for growing the business. The desire for independence is another pull factor that encourages business owners to be their bosses, which has a favorable impact on the growth of their business. The desire for wealth has also been classified as a pull factor, although it may not be the driving force in the beginning (DeMartino and Barbato, 2003; Alstete, 2003; Rosa and Dawson, 2006). Entrepreneurs are compelled to generate money, particularly in the development stage (Alstete, 2003). In regard to wealth as a motivating factor, there are certain gender disparities (Demartino and Barbato, 2003; Wilson et al., 2004). Baum et al. (2004) discovered that a diverse but interconnected set of motivational qualities and notions (along with talent) influence the performance of businesses. Entrepreneurial action can be influenced by the networking style of an entrepreneur, but this action can be changed according to multiple logics, including causality and effectuation approaches (Sarasvathy, 2001; Fisher, 2012). While causal action stresses the choice of means for achieving the desired effect, effectual action highlights the potential consequences that can be achieved using the available means (Sarasvathy, 2001). While entrepreneurial behavior emerges from commitments created in networks and connections from an effectuation perspective, networks can become a method for causal entrepreneurs to achieve the desired effect; entrepreneurs can choose whether to join these networks or not (Fabris, 2021). Entrepreneurs believe that being socially enabled can benefit not only themselves but also their businesses. The greater the strength of cause or effect, the more motivated entrepreneurs are to participate in networks, particularly when evaluating the benefits to their businesses.

The Big Five personality traits are often considered as the most comprehensive and accurate specifications of a personality (Holt et al., 2007; McCrae, 2011). Extraversion, agreeableness, openness to experience, conscientiousness, and neuroticism are the five basic elements that this model uses to determine personality. These personality traits are relevant for business studies since they indicate actions that are indicative of entrepreneurial ability (Holt et al., 2007; Obschonka et al., 2012; Zheng et al., 2010). Personality may have an enormous impact on social networks and have a direct impact on consequences (Jack et al, 2008). Despite being a major indicator of entrepreneurial success, start-up capital accounted for only 2% of that success (Baluku et al, 2016). The Big Five personality model is useful for forecasting entrepreneurial outcomes (Baluku et al., 2016). The most important indicators of entrepreneurial success are agreeableness and extraversion. Agreeableness has an impact on the strength of network interactions. The findings of this study indicate that there are numerous components of a person’s social network, which are frequently characterized by a person’s personality. Some people may find it easier to form distinct social bonds and moderate the strength of the interactions than others (Baluku et al, 2016).

Networking is a personal skill that entrepreneurs, particularly start-ups, require. A start-up can establish long-lasting relationships if the founder has effective communication skills and is well-known in the business world. As a result, business networking is critical for both new and established businesses. Networking gives business owners a competitive edge and gives them access to resources. The greatest outcome for entrepreneurs can be to access business opportunities, informational resources, more funds, and a greater consumer base which can be used to build and utilize partnerships with external stakeholders and organizations. (Albourini et al., 2020) found that by cultivating external and internal contacts, entrepreneurs can improve the growth rate of their start-ups. Networking behavior leads to cultivating and nurturing relationships with other individuals and promoting future projects (Forret and Dougherty, 2004). A rise in the customer base and better access to capital and information result from networking (Albourini et al., 2020; Jack, 2005).

6. Summary and conclusion of the study

Although empirical research has dominated the field and covers a wide range of studies, there is no commonly acknowledged framework. This extensive research on the antecedents of entrepreneurial networking behavior and its impact on business performance has provided valuable insights into the complex dynamics that underlie the success of start-ups, particularly in countries such as Slovenia, Uganda, Sri Lanka, Germany, Portugal, and China. The findings from these studies have shed light on several critical aspects of networking behavior, personality traits, and their implications for entrepreneurial success. Motivational factors, such as the desire for financial gain, risk-taking propensity, self-confidence, and the need for achievement, play a crucial role in driving networking behavior among entrepreneurs. Understanding these motivations can help entrepreneurs align their networking efforts with their goals and strategies. The Big Five personality traits—extraversion, agreeableness, openness to experience, conscientiousness, and neuroticism—are significant predictors of entrepreneurial success. Entrepreneurs should recognize and leverage their unique personality traits to enhance their networking effectiveness. The frequency, reciprocity, and social interactions within a network are essential elements that can determine the quality and effectiveness of entrepreneurial networking. Entrepreneurs should focus on building meaningful interactions that foster trust and cooperation. Networking can lead to various positive outcomes, including access to business opportunities, information, funding, and a broader consumer base. Entrepreneurs who effectively cultivate and mobilize their network connections are more likely to achieve their business goals. Therefore, entrepreneurial networking is a multifaceted process influenced by motivations, personality traits, network structure, content, and interactions. Entrepreneurs who understand these factors and strategically harness the power of their networks are better positioned for success in the competitive world of start-ups.

Author contributions

Sheetal Singh - Substantial contributions to the conception or design of the work, searching articles, conceptualization, first draft of the paper write-up.

Dr. Basri Savitha - Reviewing the manuscript critically for important intellectual content, writing the final manuscript, and editing the manuscript.