Our study explores the relations of formal and informal network ties in acquiring financial, knowledge and human resources from a social network theory perspective in a low-income country’s entrepreneurial ecosystem (EE) marked by institutional voids and limited resources.
We collect network data on 154 Nepalese entrepreneurs to unravel the resource acquisition dynamics stemming from formal and informal network ties. We analyze the data using social network analysis and node-level regression.
Our findings reveal the critical relationship between formal and informal networks in resource acquisition for entrepreneurs in low-income countries with limited resources. The utilization of formal and informal network ties depends on the institutional context and the availability of resources. Entrepreneurs utilize formal network ties to bridge networks and informal network ties to establish interconnected relationships. Entrepreneurs employ both ties within a strong institutional presence, leading to higher network centrality. Conversely, weak institutional structures result in scattered and fragmented networks.
Our study fills a gap in the literature by examining the relationship between entrepreneurs’ formal and informal network ties for resource acquisition in a resource-scarce, low-income country context. We highlight the significance of networks and offer valuable empirical insights using social network analysis, making our study unique and methodologically informative.
