Social Capital, Knowledge Strategy, and new Venture Performance: Evidence From Graduate Entrepreneurial Ventures in China

Employing a sample of 156 graduate enterprises based in China, we examine the relationship between knowledge strategy (exploration or exploitation) and new graduate venture performance, and the effects of social capital (structural, relational, and cognitive dimensions) on trade-offs of knowledge strategy. Results indicate that relational social capital is positively related to both exploration and exploitation, while cognitive social capital is negatively related to exploration. Additionally, we find that exploration and new venture performance is a U-shape nonlinear relationship, while exploitation and new venture performance is an inverted U-shaped relationship, indicating that there is a point at which focusing on either exploration or exploitation leads to reversed performance.