Abstract: Although industry position and social capital are widely recognized by entrepreneurship theory, but they have not been researchedempirically in the context of China's economy. From the perspective of network theory, they respectively reflect the height and breadth in enterprise network system, and play an important role in enterprise innovation. Using the samples from Shanghai and Zhejiang, this paper analyzes how industry position and social capital affect the relationship between entrepreneurial willingness and performance. Because of high cost of social capital and arrogance stemming from industry position, results found that they also have negative effect. Furthermore, the statistics also implies that stronger willingness to innovate, worse overall performance when industry position and social capital got non-balanced development. Thus, their equilibrium is critical to the success of entrepreneurial enterprises. Contrarily, excessive entrepreneurial willingness will not necessarily benefit performance.

Key words: industry position, social capital, entrepreneurial willingness, firm performance