Developing the strategic resources of Chinese entrepreneurial firms

Purpose: Applying the theory of cooperation and competition, this paper proposes that entrepreneurial firms can obtain social capital in terms of trust and reciprocity by developing cooperative goals with other firms, rather than competitive and independent goals. Such cooperative relationships may then enhance the firm's strategic resources, including corporate reputation and market access. Design/methodology/approach: Results were obtained from structural equation modeling of data from 120 entrepreneurial firms in Shanghai, China. Findings: The hypotheses were supported, except that reciprocity was found to affect corporate reputation negatively. The results suggest that cooperative interdependence and trust in the network of entrepreneurial firms, not self-sacrificing reciprocity, can foster a firm's business development. Originality/value: Although there is evidence in the literature suggesting that social capital influences the performance of entrepreneurial firms both directly and indirectly, there is less evidence addressing the mechanisms by which entrepreneurial firms can acquire and maintain social capital. This study addresses this research gap.