Benefits of Virtual Embeddedness for New Ventures

Abstract

The network of social relationships of an entrepreneur can help him overcome the resource constraints that he faces in the early stages of firm building. Such networks and relationships could also be built using the virtual medium. In this study, we test the hypothesis that the intensity of Virtual Embeddedness of an entrepreneur is positively associated with the benefits that he could derive in the form of Mentoring, Information, Visibility, Technical Help, Contacts and Reputational Endorsements. We use Non Parametric Correlation Analysis and Mann Whitney Tests in order to investigate the hypothesis. We find that the benefits in the form of Information, Visibility, Technical Help, Contacts and Reputational Endorsements are positively correlated with the degree of Virtual Embeddedness. The greater the level of Virtual Embeddedness of an entrepreneur, higher the benefits derived in the form of Information, Technical Help and Reputational Endorsements.Moderate level of Virtual Embeddedness is sufficient for the entrepreneur to derive benefits in the form of Visibility and Contacts.