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Restructuring Networks in Post-SocialismLegacies, Linkages and Localities$
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Gernot Grabher and David Stark

Print publication date: 1996

Print ISBN-13: 9780198290209

Published to Oxford Scholarship Online: October 2011

DOI: 10.1093/acprof:oso/9780198290209.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 13 April 2021

Network Dynamics of New Firm Formation

Network Dynamics of New Firm Formation

Developing Russian Commodity Markets

(p.136) (p.137) 5 Network Dynamics of New Firm Formation
Restructuring Networks in Post-Socialism

Gernot Grabher

David Stark

Oxford University Press

This chapter looks at differences between the founding processes of start-up firms with state-embedded spin-offs using the development of post-Soviet commodity exchange markets as a representation. It focuses on the extensiveness of ties among founders and suggests that social ties are key to organizational outcomes of new firms in two ways. Firstly, the social structure of founding networks regulate the range of individual action as the stronger the ties among the actors, the narrower their latitude for autonomous action. The more tight-knit or dense the ties in a network, the greater the autonomy and freedom of individual action are constrained. Secondly, the diversity of founders' ties shape the institutional embeddedness of the new firm that they create. The discussion of the model of founding network density and its effects on performance follows a brief background of the emergence of new firms in Russia.

Keywords:   start-up firms, spin-offs, post-Soviet markets, founding network density, new firms, social ties, founding networks

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