Do personal networks affect the success of foreign venture performance? An empirical analysis of Nordic firms in Poland

Erik Rehbinder

Student thesis: Master thesis

Abstract

Theories regarding personal networks suggest that firms with activities in transition economies need to leverage their personal network in order to be successful. Other research has shown that the use of personal networks influence the success when firms internationalize for the first time. With this in mind, the intention of this paper is to inspect if Nordic firms that entered Poland, needed to rely on their personal network to increase their chance of success. The hypotheses in this paper stated that the use of high quality personal contacts would lead to increased foreign venture performance, while relying too much on personal networks alone would reduce performance. Also, it was assumed that small and medium sized enterprises (SME’s) were more reliant on having access to personal contacts of high quality in order to succeed, compared to large firms. The hypotheses were tested by using linear regression, with polish venture performance as the dependent variable. To conduct the analysis, 1020 Nordic firms active in Poland were contacted. 127 firms responded, but only 103 respondents were eligible for further analysis. The sample respondents were from Norway, Sweden, Finland and Denmark. Findings from the regression analysis did not find support for the established hypotheses. One can therefore not conclude that the use of personal networks has an impact on the success of Nordic ventures in Poland. There are several limitations to this research and it is the authors’ opinion that the findings cannot be generalized. This is mainly because the study covered a wide range of companies that were diverse, both in size, industry sector and experience in Poland. Further research may find support for the hypothesis if a more rigid approach is applied.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages77