In today's globalized business environment, technological start-ups are both an important source of innovation and technological advancement and a dynamic vehicle for national wealth and job creation. However, technological start-ups find it difficult...
In today's globalized business environment, technological start-ups are both an important source of innovation and technological advancement and a dynamic vehicle for national wealth and job creation. However, technological start-ups find it difficult to survive and grow under the ever increasing threat from established companies due to their limited access to resources, information and networking capabilities.
The purpose of this study is to investigate what are the key factors that determine the performance of technological start-ups from the resource-based view of the firm. The entrepreneurial characteristics, technological capabilities and networks have often been explored as key enterprise resources of technological start-ups in a number of previous studies. However, psychological characteristics and competence of the entrepreneur are seldom identified as a core resource of technological start-ups. Technological resource and networks have little empirical support in their relationship to firm performance. Moreover, few researches were conducted on the interplay and the causal relationships among enterprise resources and business performance.
This study is designed to explore: (1) the impact of entrepreneurial characteristics, technological capabilities and networks on firm performance; and (2) the causal relationships and the mediator effects among the latent variables and firm performance.
Data for the study was compiled through mail surveys to entrepreneurs representing 701 technological start-ups. In data analysis, SPSS 12.0 OK for Windows was used for basic descriptive statistics while AMOS 4.0 by means of structural equation model was used for hypothesis testing.
Empirical results of the hypothesis testing are summarized as follows:
First, entrepreneurial characteristics, technological capabilities and networks have statistically significant influence on firm performance.
Second, entrepreneurial characteristics have significant influence on technological capabilities and networks.
Third, networks did not have significant influence on technological capabilities.
Key implications based on the results of the study are as follow:
First, it suggests that achievement, industry experience and social competence of the entrepreneur, continuous accumulation of technological capabilities and proactive networking capabilities are essential for business performance of technological start-ups.
Second, it suggests that psychological characteristics and social competence of the entrepreneur together with background characteristics of the entrepreneur be considered as an important core resource; and that technological capabilities and networks be actively taken into account in establishing policies.
In conclusion, entrepreneurial characteristics and technological capabilities
-representing the internal resources-and networks-a channel for mobilizing the external resources-are verified as important enterprise resources that influence the outcome of technology-based start-ups.
The study calls on technological start-ups to equip themselves with superb internal resources and be proactive in seeking networking opportunities in order to make their business a success.