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Paper info: Value functions of initial relationships in new business start-ups


Value functions of initial relationships in new business start-ups


Jose Novais Santos
Lisboa University
Jose Novais Santos and
Joao Mota
Lisboa University
Joao Mota

Place of Publication

The paper was published at the 35th IMP-conference in Paris, France in 2019.


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Studies on entrepreneurship and new business formation differ in their focus. On the one hand, entrepreneurship tends to focus on the entrepreneur personal characteristics or their network of personal relationships. On the other hand, the development of new business focuses primarily on the processes that lead to the emergence and development of a new organization in a business network context. By considering that the existence of business relationships is a necessary condition for the very existence of a business, the emergence of a new firm involves the need to deal with the process of relating it to a pre-existing network. This paper’s objective is to analyse the insertion process of new firms in the business network, considering the nature and the value creating functions of its initial business relationships. To this end, we performed two exploratory case studies focusing on the insertion process of two small firms into their relevant networks. Our results suggest that initial relationships accommodate a combination of direct and indirect value functions. Within this particular network context, the perception of value of relationships between the firms and an incubator is derived mainly from their indirect functions, regarding their role in the initial construction of attractiveness of the new firms as exchange partners.