Network diversity, institutional intermediaries, and new venture performance in an entrepreneurial ecosystem of China

Previous research has widely recognized the importance of network diversity for entrepreneurial success. In this article, we look at the role of institutional intermediaries in this context, which provide another way to embed new ventures in their local environment. We propose two ways entrepreneurs engage with multiple entities in their localities—(a) by developing personal networks that connect with different actors and (b) by affiliating with institutional intermediaries—and examine how the two ways interplay to influence new venture performance. A longitudinal survey of 165 entrepreneurs in China found that the diversity of entrepreneurs’ personal networks is positively related to new venture performance among those affiliated with public incubators, but not among those affiliated with private incubators. While private incubators can substitute diverse networks, public incubators complement diverse personal networks to improve new venture performance. The study makes new theoretical contributions to the literature on entrepreneurial networks and institutional intermediaries and provides implications for navigating entrepreneurial ecosystems.