Relational and institutional embeddedness of Web-enabled entrepreneurial networks: case studies of netrepreneurs in China

Drawing from a multidisciplinary literature, we form a theoretical perspective of the social embeddedness of economic activity as interpersonal ties that are formed in relation to the institutions of an economy. From this perspective, we then seek to explain the emergence of networks of micro-entrepreneurs that conduct their business on the Taobao Web platform in China, and we derive theoretical propositions about the social embeddedness of Web platform-based economic activity. Two case studies of such networks show how Web platform tools and services create conditions of possibility for developing online business by micro-entrepreneurs and for overcoming cultural reluctance of economic exchange with strangers. Our research suggests that economic activity on Web platforms is embedded in a mix of virtual and community-based relations that are shaped by and alter the behavioural norms of a local culture. It also points to the government and the corporate Web platform service provider as important organisational actors enabling the creation of entrepreneurial networks.