Essays on Founder's Political Ties and New Venture Performance in Developing Economies

Founders' political ties play an important role in enhancing the legitimacy, innovative capabilities and performance of new ventures. One of the main challenges they encounter is that their failure rates are highest during the initial years of their life cycle due to their limited

resources. Previous studies have argued that managerial actions are embedded in networking relationships, and that new ventures depend on acquiring resources through their connections with the external environment. In addition, political ties have implications for new venture performance. However, while research has investigated the relationship between political ties and performance in large firms, only a few studies have explored the role of political ties on new venture performance, especially in developing markets where political ties are prevalent. Consequently, this limits theoretical generalizability and creates a gap in the literature. This thesis integrates three theoretical lenses, resource dependence theory (RDT), institutional theory and the absorptive capacity perspective, to examine the impact of founders' political ties on new venture performance in developing markets. The work is based on a four-paper approach, comprising a systemic review study and three interrelated empirical studies, which contribute significantly to current knowledge.

The first study conducts a systematic literature review which investigates the ways in which political ties have been examined in the management literature in order to identify the main themes of previous research. Based on the review of articles published between 2000 and 2022, the analysis demonstrates the role of political ties in enhancing firm performance. In addition, the study develops a framework for the political ties-firm performance relationship and classifies the articles into seven different management perspectives that offer clear understanding of the political ties concept. The framework includes the main antecedents and outcomes of political ties, together with the mechanisms underlying the political ties-firm performance relationship. The second study examines the moderating role of legal registration on the relationship between founders' local and central political ties and new venture performance, using unique data from 5127 new ventures that were founded between 2003 and 2010 in Jordan. The results show that new ventures with local ties are less likely to fail than those without such ties, while central ties have no significant effect on new venture failure. In addition, new ventures that are both registered and have local political ties are more likely to fail than those without such ties and are not registered.