Networking capability, new venture performance and entrepreneurial rent

Purpose – Prior research suggests that insufficient networking capability of a firm (i.e. the capability to establish, maintain, and leverage ties, contacts and connections) poses a potential barrier to its growth, the causal logic of networking capability and firm performance has not been fully articulated and a clear link between network resources and networking capability, however, remains to be demonstrated. The paper aims to discuss these issues. Design/methodology/approach – Conceptually and theoretically, the paper emphasizes the importance of networking capability in network resources mobilization and deployment, innovation and rent-seeking and argues that the firm should build strong networking capability to creatively and artfully manage its networks to sustain its vitality. Findings – The paper builds a theoretical model relating networking capability, network resources, open innovation, and resulting new venture success and economic rents. The paper argues that new ventures should build and leverage networking capability to manage network relationships and resources to innovate, develop and create value, and appropriate various types of economic rent. Research limitations/implications – The framework generally promoted building networking capability as a means of accessing to a broader range of network resources and opportunities than a new venture is able to maintain internally for innovation and growth, the benefits may not be so clear-cut. A useful future research direction would be to determine empirically the relationship between networking capability and new ventures' survival and growth, the extent to which new ventures are able to derive economic rents from exploiting networking capability, and how this is related to the degrees of competitive success they attain. Practical implications – The research framework suggests that networking capability can help new ventures to take advantage of opportunities discovered and serve unexploited markets. The study implies that networking capability can be a powerful weapon for new ventures to implement open innovation strategy to build solid growth businesses and to gain sustainable competitive advantage. Originality/value – The paper develops a parsimonious model that links new venture survival and success with networking capability, network resources and open innovation. Also, this model shows why and how new ventures can leverage networking capability to generate and appropriate economic rent simultaneously.