Embedded entrepreneurs in residential neighbourhoods: dynamics in and effects of social networks

Abstract

This PhD thesis focuses on entrepreneurs and small firms based in residential neighbourhoods in the Netherlands. In the past two decades the neighbourhood has become an increasingly important location for small and home-based firms. Here, working, living and business life are strongly intertwined. This raises the question to what extent firms and entrepreneurs located in residential neighbourhoods make use of and interact with their local environment. In this thesis, the relationship between locally-based entrepreneurs and the neighbourhood context is explored by studying their social networks. Insights from both Economic Geography and Sociology, e.g. Social Network Analysis and Social Capital Theory, are used in this dissertation. The socio-spatial networks of the neighbourhood-based entrepreneurs are studied from a dynamic perspective, allowing for the exploration of network change over time and the effects of these changes on firm performance. Furthermore, this thesis also examines the potential effect of the presence of local entrepreneurship on the neighbourhood context with regard to local social value creation. Literatures on Social Entrepreneurship and Corporate Social Responsibility are used to explore the potential social involvement of these entrepreneurs and the potential drivers of this behaviour. In particular, the role of their (local) social networks is taken into account as explanatory factor. The study has two empirical research parts. The first is a quantitative analysis of the development of the ego-networks of neighbourhood entrepreneurs over a five year period, using data from two waves of a survey (Survey on the Social Networks of Entrepreneurs) conducted in the Netherlands in 2008 and 2014. The second part consists of in-depth interviews with 18 entrepreneurs in two different Dutch cities on their involvement with their local environment and their corresponding local social value creation behaviour. The analyses of the social networks of entrepreneurs located in Dutch residential neighbourhoods, have demonstrated that the social networks of entrepreneurs located in Dutch residential neighbourhoods are important for their firms’ performance change and that their local social networks drives local social value creation. Additionally, this research project has revealed that the social networks of the neighbourhood-based entrepreneurs are far from stable. Through the ability to change their networks over time, the entrepreneurs are found to successfully use their network contacts on behalf of their firms’ development. When turning to the source of the entrepreneurial network contacts, the analyses presented here suggest that Dutch neighbourhood-based entrepreneurs only have a small number of network contacts in the neighbourhoods where they themselves both work and reside. This suggests that the local embeddedness of these firms is limited, making them less locally embedded than was expected at the outset of this study. Thus, although the neighbourhood-based entrepreneurs are socially embedded, their local connections remain limited. This suggests that the role of current-day neighbourhood-based is different from that of the businesses that were present in neighbourhoods between the 1950s and 1980s. This outcome calls for additional research on neighbourhood-based entrepreneurship nowadays and the role it might play on both the economic and social dimensions.