Nascent entrepreneurial capital and Its impact on new venture creation

Abstract

Purpose: This research aims to study the roles played by entrepreneurial human, social, cognitive capital and related process dynamics in venture emergence, exploring their main and combined effects on the model of the determinants of success in Nascent Entrepreneurship. This provides strong evidence for the connection from resources to process dynamics and ultimately to venture outcomes. Methodology Approach: An empirical model is developed to test a research’s framework that focuses on formulating and testing coherent conceptual propositions utilising a longitudinal sample of secondary data from a mix gender sample of 816 nascent entrepreneurs in the United States who were tracked over four consecutive years. Findings: The empirical analysis showed significant support for the proposed conceptual model. The findings support the partial influence of the main attributes of nascent entrepreneurial capital (social, human and cognitive capitals) on the outcomes of new venture creation process, where the drivers of positive outcomes appear to coincide with variables that relate to cognitive capital. More importantly, the empirical analysis finds significant interaction effects between elements of nascent entrepreneurial capital and their interplay with the process dynamics confirming the conceptual proposition of an integrative framework encompassing significant associations that constitute the phenomenon of new venture creation. The integrative perspective has implications for Nascent Entrepreneurship theory and practice. First, the main effects of resource endowments should not be taken into account in isolation as predictors of new venture creation outcomes. Second, the role of process dynamics and cognitive capital is best theorised as a moderating variable between the startup capital’s attributes and the venture creation outcomes. Therefore, the findings demonstrate a dominant role of the integrative modelling in driving the transition to the start-up phase. Limitations: There is no consensus on the measures of success for entrepreneurship research at the nascent phase of business venturing. There is substantial variation in the literature in terms of outcomes, definitions, conceptual works and design issues, and therefore further consideration to control for variations is deemed necessary to ensure valid, cumulative and definitive answers that must be built upon a solid and unified basis. ` Originality: Thesis is original in integrating cognitive abilities and process dynamics with social and human capital in a model of the determinants of success in Nascent Entrepreneurship. While we may consider alternative ways to look at interaction/moderation effects across the three different types of “ start-up capital”, integrating the three elements in a structured and dynamic model of Nascent Entrepreneurship is an original contribution.