Abstract

This article investigated the impact of the owner-manager’s network on firm's innovation. The main hypotheses of this study were: total network size, the role model and opportunity motivation, all have positive effects on the firm's innovation. Additionally, it was hypothesized that the impact of total network size on innovation is moderated by the role model and opportunity motivation. For testing the hypotheses, this study used a sample of 1668 owner-managers in the Global Entrepreneurship Monitor (GEM) survey data collected through interviews with adults in Iran and Denmark in 2008, 2009 and 2010. The total network size was measured on a numerical scale in terms of number of different categories from whom a person gets advice. The measure for the role model was personal knowing of an entrepreneur within the last two years.  Opportunity motivation got a numerical value based on its category: “motivated because of no better working option” or “no better option and also motivated by opportunity” or “motivated by opportunity” or “have job and seek opportunity”. Innovation was measured on a numerical scale based on time that the technologies needed for producing the product or service is available, customers who consider the product as new and competitors who have the same products or services. The method for testing the hypotheses was multiple regressions controlling for country, sex, age and education of the owner managers. Results showed that the total size of networks has positive effect on firm’s innovation and the impact of social networks on innovation is moderated negatively by the role model, namely the entrepreneurs who do not have a role model, size of network is more strongly associated with firm’s innovation. Maybe networks compensate for the role model.

Key words: Networks, innovation, firms, opportunity motivation, role model.