An exploratory analysis of new firm foundings by trading community members and their survival

Abstract

Prior research shows the importance of trading communities in the Indian economy. We investigate whether these trading communities have an advantage in firm founding and/or firm survival. While prior research suggests that trusted within-community networks enable access to resources and knowledge and help support entrepreneurs from these communities, some scholars show that community ties constrain entrepreneurial options and produce lock-in. We hypothesise that trading communities in India have higher founding and survival rates and we find strong support for our hypotheses. Our research contributes to research on communities and entrepreneurship, and to our understanding of the Indian entrepreneurial context.