Socioeconomic status and entrepreneurial networking responses to the COVID-19 crisis.

Abstract

Networks play a vital role for entrepreneurs in overcoming crises. The most vulnerable to crises are those from lower socioeconomic backgrounds. However, we know less about the role of socioeconomic status in entrepreneurial networking. This study investigates whom entrepreneurs call in case of emergency. We develop hypotheses on how entrepreneurs' socioeconomic status influences models of networking agency in situations of economic threat. The results of a pre-registered randomized experiment in the COVID-19 context conducted with 122 entrepreneurs from the US indicate that entrepreneurs in higher socioeconomic status positions activate contacts to serve their own goals (i.e., independent networking agency) when facing an economic threat. In contrast, and counter-intuitively, entrepreneurs of lower socioeconomic status are more likely to support others when facing an economic threat (i.e., interdependent networking agency). Exploring the evolving network structure, our explorative post-hoc analyses suggest that entrepreneurs activate closer networks (i.e., higher density and stronger ties) under threat. The study discusses the implications of these findings for the theory of entrepreneurial networking in general and network responses to crises in particular.