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INTRODUCTION
Knowledge is a strategic asset to new ventures in emerging economies. In a global economy, firms face a constant impetus to upgrade knowledge levels to keep up with competition. Often, faced with critical deficiencies in the institutional environments of emerging markets, new ventures resort to a network strategy, engaging in proactive behavior that deepens and/or broadens their relationships with other companies in order to generate valuable new knowledge (Batjargal et al., 2013; Li & Zhang, 2007; Su, Xie, & Xang, 2015). While a network strategy is formidable in any context, it is especially vital for new ventures in emerging economies since these firms lack key resources and capabilities (Prashantham & Dhanaraj, 2010; Zhou, Barnes, & Lu, 2010). Absent a strong institutional environment, these firms seek to be ‘highly networked with external providers of requisite resources and information’ in order to upgrade their knowledge levels (Luo & Child, 2015: 398).
However, an important but as yet underexplored insight that emerges from Luo and Child (2015) is that the nature of knowledge utilization – and hence how this is influenced by proactive network behaviors – may be different in emerging economies. Network behaviors emphasize agency, rather than network structures per se, and have particular relevance for new ventures that are unlikely to have extensive network structures in place, especially in emerging economies (Khanna, 2007). We start with the assumption that the role of network behaviors in fostering knowledge cannot be simply extrapolated from studies in advanced economies (e.g., Hansen, 1999; Phene, Fladmoe-Lindquist, & Marsh, 2010).
Our goal here is to study the extent to which network strategy influences knowledge accumulation of new ventures in an emerging market context. Following network theorists, we focus on two distinct dimensions of network strategy – network broadening and network deepening – and study their role in fostering different knowledge types in emerging economy-based new ventures. Network broadening refers to the ‘the extent to which an entrepreneur reaches out to new people’ while network deepening describes ‘the extent to which an entrepreneur strengthens ties to existing personal network contacts’ (Vissa, 2012: 494). While new ventures make use of different types of knowledge to grow their business, we focus our attention on two critical knowledge types – technological knowledge and market...