Abstract

This research investigates whether entrepreneurs can make a difference in founding firms or whether they are relatively powerless in the face of environmental threats. We posit that they can use their social capital and social skills – moderated by cognitive factors – to enhance a firm’s legitimacy and facilitate resource assembly, which are precursors to firm founding. We control for social and technological uncertainty as well as entrepreneurial climate. We draw on population ecology theory, institutional theory, industry organization economics, social capital theory and cognitive theory to test the influence of each of their reputed effects on firm founding.

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