Management Papers

Document Type

Journal Article

Date of this Version


Publication Source

Strategic Management Journal





Start Page


Last Page





This study examined the influence of internal capabilities and external networks on firm performance by using data from 137 Korean technological start-up companies. Internal capabilities were operationalized by entrepreneurial orientation, technological capabilities, and financial resources invested during the development period. External networks were captured by partnership- and sponsorship-based linkages. Partnership-based linkages were measured by strategic alliances with other enterprises and venture capitalists, collaboration with universities or research institutes, and participation in venture associations. Sponsorship-based linkages consisted of financial and nonfinancial support from commercial banks and the Korean government. Sales growth indicated the start-up's performance. Regression results showed that the three indicators of internal capabilities are important predictors of a start-up's performance. Among external networks, only the linkages to venture capital companies predicted the start-up's performance. Several interaction terms between internal capabilities and partnership-based linkages have a statistically significant influence on performance. Sponsorship-based linkages do not have individual effects on performance but linkage with financial institutions has a multiplicative effect with technological capabilities and financial resources invested on a start-up's performance. Implications and directions for future research were discussed.

Copyright/Permission Statement

This is the peer reviewed version of the following article: Lee, C., Lee, K. and Pennings, J. M. (2001), Internal capabilities, external networks, and performance: a study on technology-based ventures. Strat. Mgmt. J., 22: 615–640., which has been published in final form at doi: 10.1002/smj.181. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving


entrepreneurship, capabilities, social capital, social networks, start-up companies, innovation



Date Posted: 27 November 2017

This document has been peer reviewed.