The Influence of Support by a Network with Structural Holes on the Performance of Student Startups

Abstract

This paper analyses the influence of the support from the environment, in which students live and work, on the success of student startups. A unique experiment was conducted, in which one group of students was confronted with a network of external specialists and the other group was not confronted with this network. This experiment dealt with the endogeneity problem that is often related with social networks, because this time part of the network was externally delivered to the startups involved in the experiment. The experiment also delivered data from which we can conclude that student startups in a more traditional market profit more from a dense network than from a network with structural holes in the first six months after starting their businesses. Student startups that started in less developed markets seemed to profit more from structural holes in this startup phase. In both cases there was no significant evidence that a network with structural holes contributed to a higher performance of student startups in their first six months. This paper ends with recommendations for universities how to help their student startups to succeed better within the educational system.