Social Networks, Functional Links, and Spatial Proximity. Founding Processes and Early Development of Kibs Start-ups

Bridging a twofold gap in existing literature, this paper is situated at the interface between entrepreneurship research and studies about knowledge intensive business service firms (KIBS). On the one hand, in entrepreneurship research, there is a lack of studies examining explicitly the KIBS sector. On the other hand, most research dedicated to the study of KIBS does not consider processes of firm foundations. The present contribution highlights important elements of start-up processes in the KIBS sector by focussing on social networks of the founders and firms and on the relevance of relational and spatial proximity. We examine the subject by presenting the results of in-depth case studies of newly founded KIBS. On the basis of these studies it can be shown that relational proximity is of crucial importance within the founding process, and remains so in the course of the firm’s development. Spatial proximity, in contrast does not generally matter. It depends on the firm and the external characteristics whether linkages in the region of the firm play a decisive role. JEL-Classification: D21, D83, L19, L86, O31, R19