A Cause-Effect Study of Inter-Firm Networking and Corporate Entrepreneurship : Initial Evidence of Self-Enforcing Spirals

Participating in inter-firm networks has become increasingly popular to enhance corporate entrepreneurship. Trust, relationship diversity and knowledge transfer are considered some of the prominent cornerstones of well-functioning networks. Using longitudinal survey data covering a population of 41 firms operating in two SME networks, we examine cause-effect relationships between interorganizational trust, relationship diversity and knowledge transfer, and corporate entrepreneurship among networking firms. We found a causal influence of knowledge transfer and relational diversity on corporate entrepreneurship. Our approach also identified self-enforcing spirals between network constructs and corporate entrepreneurship. Firms displaying high corporate entrepreneurship may stimulate the creation of relationships such as those characterized by high knowledge transfer that, in turn, are relationship characteristics that stimulate corporate entrepreneurship