Entrepreneurship and Strategy

Click here to Entrepreneurship and Strategy IG home.
VideoArticle Title/ Author(s)/Managerial Abstract
Laurina Zhang: Who does (not) benefit from entrepreneurship programs? | SMJ Video AbstractWho does (not) benefit from entrepreneurship programs?
Zhang,Laurina; Elizabeth Lyons
Given the increasingly competitive landscape for entrepreneurship education programs, it is important to understand when and for whom they have the greatest impact. Using 5 years of data from a technology entrepreneurship training program, we show that individuals with a higher predisposition toward the type of entrepreneurship being taught by the program, measured by prior technology entrepreneurship experience, are less likely to benefit from training. Our findings imply that individuals who enter programs with the skill set being taught benefit less from the program at the margin, and that individuals without prior experience can be trained in entrepreneurship. These patterns have implications for entrepreneurial program strategy, individuals considering entry into entrepreneurial careers, and firms deciding whether to develop entrepreneurial capabilities in‐house or acquiring them externally.
From Farms to Fuel Tanks - Who defines the market and why it matters. | SMJ Video AbstractFrom farms to fuel tanks: Stakeholder framing contests and entrepreneurship in the emergent U.S. biodiesel market
Hiatt,Shon R.; W. Chad Carlos
Entrepreneurs entering new markets must consider how their products or services create value for customers. What customers value, however, is often shaped by competition between different stakeholders who seek to define problems and appropriate solutions. We argue and find that competing stakeholders influence what becomes valued in the market and shape the technologies and products developed by entrepreneurs. From the perspective of those promoting new markets, market growth requires a balancing act between maintaining control over market definitions and attracting new customers. In growing a new market, entrepreneurs and market pioneers may unintentionally attract other stakeholders who seek to alter or redefine market meanings, which can drive demand away from initial producers, foster the development and adoption of unforeseen technologies, and facilitate market entry of diverse organizations.
Mahka Moeen and Rajshree Agarwal: Incubation of an Industry | SMJ Video AbstractIncubation of an Industry:Heterogeneous Knowledge Bases and Modes of Value Capture
New technological breakthroughs present managers of existing firms and aspiring entrepreneurs with opportunities to create altogether new industries. During the vibrant incubation period, we find that multiple firms capitalize on diverse knowledge bases to shape the industry's knowledge evolution and also capture economic value in diverse ways. Existing firms in the obsolescing industry are more likely to become targets in acquisitions given their complementary knowledge. Science‐based start‐ups are more likely to engage in acquisitions and collaborations with established firms. Diversifying firms are more likely to commercialize products after leveraging of internal development, acquisitions, and alliances. Our study highlights the importance for managers to think about “success” and “failure” across multiple yardsticks of performance, rather than only as product commercialization as the sole goal .
Jeffrey York & Michael Lenox - Building Green Industries | SMJ Video AbstractExploring the sociocultural determinants of de novo versus de alio entry in emerging industries
Jeffrey G. York; Michael J. Lenox
Do university entrepreneurship programs promote entrepreneurship? | SMJ Video AbstractDo university entrepreneurship programs promote entrepreneurship?
Charles E. Eesley; Yong Suk Lee
Recently, many universities have developed programs to promote entrepreneurship. However, relatively little is known about the impacts of such university initiatives. In this article, we examine the two major initiatives that were established in the mid-1990s—the Stanford Center for Entrepreneurial Studies at the Business School and the Stanford Technology Ventures Program at the Engineering School. We find that the Business School program had a negative to zero impact on entrepreneurship rates and participation in the Engineering School program had no impact on entrepreneurship rates. However, the Business School initiative decreased startup failure and increased firm revenue. University entrepreneurship programs may not increase entrepreneurship rates, but help students better identify their potential as entrepreneurs and improve the startup performance.
Entrepreneurial teams' acquisition of talent | SMJ Video AbstractEntrepreneurial teams' acquisition of talent: Evidence from technology manufacturing industries using a two-sided approach
Florence Honoré; Martin Ganco
Growing startups face the question of who to hire and how much to compensate the new hires. Simultaneously, prospective new hires ask which startup to join and how much their salary will be. We explore these questions using a novel method that tackles the mutual selection process. In the context of five technological manufacturing industries, we find that having industry experience within founding teams may not be necessary to attract new hires with high quality if the startup can signal its own quality through other means such as having a larger founding team. Our results indicate that startups prefer employees with industry experience for which startups offer a wage premium. Thus, employees seeking startup employment benefit from gaining industry experience prior to joining a startup.
Entry, Exit and the Potential for Resource Redeployment | SMJ Video AbstractEntry, Exit and the Potential for Resource Redeployment
Lee,Gwendolyn K.; Marvin B. Lieberman, Timothy B. Folta
The ability to redeploy resources inside the firm reduces the cost of entry “mistakes.” If a new business turns out to have poor profitability, the ability to redeploy more of its resources back into the firm's other businesses allows recycling of investment and can speed up the retreat. This reduces not only the cost of exit, but also the cost of entry. Managers should therefore be more willing to experiment and take risks in developing businesses that are more related to the firm's existing businesses, whereas if redeployment is likely to be difficult, managers should be cautious about entering. New businesses should be chosen in ways that facilitate redeployment, and managers should consider the implications of redeployment when setting the performance thresholds that justify entry and exit .
Mind the gap: Role of gender in entrepreneurial career choice/social influence | SMJ Video AbstractMind the Gap: The Role of Gender in Entrepreneurial Career Choice and Social Influence by Founders
Rocha,Vera; Mirjam van Praag
Women are less likely to be entrepreneurs than men. We investigate whether working in a startup founded by a woman instead of a man influences individuals' decision to become an entrepreneur later. We find this to be the case for women. This result is best explained by female founders acting as role models for their female employees in male‐dominated domains. Female founders able to break gender stereotypes seem to have an influence on the career choices of their female employees, especially among those who have lacked contact with entrepreneurs. Moreover, this influence is stronger if the female founder and employee have similar backgrounds. These findings confirm the importance of social interactions at work and suggest new ways to inspire more women to launch startups.
How Entrepreneurs Leverage Institutional Intermediaries | SMJ Video AbstractHow entrepreneurs leverage institutional intermediaries in emerging economies to acquire public resources

Armanios,Daniel Erian; Charles E. Eesley, Jizhen Li, Kathleen M. Eisenhardt
A key dilemma facing entrepreneurs is how to finance their ventures. While entrepreneurs in developed economies can seek VC or angel investment, entrepreneurs in emerging economies often need to pursue potential government funding opportunities. Our study highlights three strategies for acquiring government funding. Well‐connected entrepreneurs can leverage their political ties to acquire such funding. Less‐connected entrepreneurs can leverage science parks that in emerging markets are designed to help governments to identify promising ventures. For returnees whose ample experience abroad may not fit with local ways of doing business, gaining science park admission can certify quality and so ease the path to government funding. For technically skilled local entrepreneurs who lack business skills, science parks can help build such skills, which then ease the path to government funding .
The Lean Startup Method | SEJ Video AbstractThe lean startup method: Early-stage teams and hypothesis-based probing of business ideas
Michael Leatherbee; Riitta Katila
Lean startup methodology has rapidly become one of the most common and trusted innovation and entrepreneurship methods by corporations, startup accelerators, and policymakers. Unfortunately, it has largely been portrayed as a one-size-fits-all solution—its key assumptions subject to little rigorous empirical testing, and the possibility of critical boundary conditions ignored. Our empirical testing supports the key assumptions of the method, but points to business education of team members as a critical boundary condition. Specifically, MBAs resist the use of the method despite being in a strong position to leverage it. Results from a post hoc analysis we conducted also suggest that more engagement with the method relates to higher performance of the firm in the 18-month period following the lean startup intervention.
Martin Ganco - Work Context & Entrepreneurship | SMJ Video AbstractCutting the Gordian knot: The effect of knowledge complexity on employee mobility and entrepreneurship
Martin Ganco
Alvarez-Garrido and Dushnitsky: Investor complementary assets | SMJ Video AbstractAre Entrepreneurial Venture’s Innovation Rates Sensitive to Investor Complementary Assets? Comparing Biotech Ventures Backed by Corporate and Independent VCs
Dushnitsky,Gary; Elisa Alvarez-Garrido
Entrepreneurial ventures are a key source of innovation. Nowadays, ventures are backed by a wide array of investors whose complementary asset profiles differ significantly. We therefore assert that entrepreneurial ventures can no longer be studied as a homogeneous group. Rather, we harness the inherent dichotomy in the profiles of independent VCs and corporate investors to study ventures' innovation outcomes. Our sample consists of 545 U.S. biotechnology ventures founded between 1990 and 2003 and backed by independent venture capitalists (VCs ) or corporate VCs (CVC ). We find CVCs ' investees exhibit higher rates of innovation output, compared to independent VC ‐backed peers. Moreover, the performance of CVC ‐backed ventures is sensitive to their ability to leverage corporate assets, underscoring the role of CVC accessibility and FDA approval requirements as the mechanisms associated with CVC contribution .
What is a pivot? | SMJ Video AbstractWhat is a pivot? Explaining when and how entrepreneurial firms decide to make strategic change and pivot
Jacqueline Kirtley; Siobhan O'Mahony
The term “pivot” is used extensively by practitioners and scholars alike, yet little is known about when and how entrepreneurial firms actually choose to change their strategies and when that change constitutes a pivot. We find that entrepreneurial firms choose to change their strategies only after receiving new information that conflicts with or expands their beliefs about their firm or uncertainties they face. However, this is more rare than the norm. Rather than make wholesale change with one decision, firms incrementally exit or add a single element to their strategies. A firm pivots and reorients their strategic direction by reallocating or restructuring the firm's activities, resources, and attention through an accumulated series of decisions to address the on-going stream of problems and opportunities early-stage firms confront.
Decision Weaving: Forming Novel, Complex Strategy in Entrepreneurial Settings | SMJ Video AbstractDecision weaving: Forming novel, complex strategy in entrepreneurial settings
Timothy E. Ott; Kathleen M. Eisenhardt
Strategy formation is central to why firms seize novel opportunities while others fail. By comparing three venture-pairs, we develop a fresh framework for strategy formation in nascent markets where strategy is both novel and complex: Decision weaving. Effective strategists: (a) use sequential focus (not parallel) to learn about successive focal strategic domains, (b) pause at learning plateaus to consolidate that knowledge about a focal domain, and (c) use stepping stones to make progress in background domains without losing focus. These behaviors enable both fast, effective learning, and evolving yet holistic understanding of an emerging strategy. More importantly, these behaviors set the stage for rapid and profitable scaling (i.e., growth).
Born globals from emerging economies |GSJ Video AbstractBorn globals from emerging economies: Reconciling early exporting with theories of internationalization
Deepak Somaya; Marleen McCormick
Our research finds that exporting by young firms are enabled to a greater extent (than established firms) when they use Internet technologies and tap into mobile talent (such as cross-national entrepreneurs and leaders with international experience), which helps to overcome key constraints in tapping into international markets. We also found that young firms overcome home-country institutional and infrastructure deficiencies in emerging economies, specifically, by receiving efficient government services and strategically locating in well-resourced centers such as capital cities, which helps them more in exporting as compared to established firms. Our findings help to explain the modern phenomenon of “born global” firms, who have broken away from the traditional path of focusing first on domestic markets and then engaging in incremental international expansion.
Promotion- versus Prevention-Focused Effectuation Principles and Entrepreneurial Orientation |SEJ Video AbstractSome principles are more equal than others: Promotion- versus prevention-focused effectuation principles and their disparate relationships with entrepreneurial orientation
Maximilian Palmié; Peter Huerzeler, Dietmar Grichnik, Marcus M. Keupp, Oliver Gassmann
Practitioner-oriented presentations and texts on entrepreneurial decision making frequently portray the means-driven effectuation approach as opposite to the goals-driven causation approach. Our study challenges this portrayal by highlighting substantial differences between the individual effectuation principles. Specifically, our research suggests that these principles differ in the underlying psychological processes and consequently in their relationships with key organizational attributes such as the firm's entrepreneurial orientation. In these important regards, some effectuation principles are actually more similar to causation than they are to other effectuation principles. Our study has substantial implications for the adoption of effectuation and for the “mixing and matching” of effectuation and causation. It not only makes a difference whether decision makers pursue an effectuation or causation approach, but also which effectuation principles they choose.
Rita McGrath discusses Ian MacMillan |SEJ Video AbstractThe Academic Entrepreneur: A Biographical Sketch of Ian C. MacMillan's Contributions to Establishing the Field of Entrepreneurship
Rita Gunther McGrath
Ian C. MacMillan, originally from Africa, is a seminal figure in forging the contours of the present-day field of entrepreneurship. He was the first to empirically explore topics such as venture capital decision making; entrepreneurial networks; cultural influences on entrepreneurial behavior; and many issues in corporate venturing. Through the creation of vibrant, global, scholarly networks, the founding of the Journal of Business Venturing, his dedication to training and mentoring the next generation of scholars, and establishing the first large-scale systematic global data collection in the field, Mac has made an irreplaceable contribution to the well-established field that entrepreneurship has become. He and his students have been acknowledged as having made significant breakthroughs in our understanding of entrepreneurial phenomena, recognized by a burgeoning number of awards and testaments to scholarly recognition. He argues that the challenge for future researchers will be to tackle big, messy problems that do not lend themselves to the popular methodologies employed by academia today.
Chris Bingham & Steve Kahl - Anticipatory Learning |SEJ Video AbstractAnticipatory Learning
Christopher B. Bingham; Steven Kahl
Learning from negative outcomes is of fundamental interest to scholars. Yet most research in this area explores learning from actual outcomes. By contrast, we add to the literature by setting forth a theoretical framework that highlights learning from the anticipation of negative outcomes rather than actual outcomes. Using an inductive, multiple case research design, we develop an emergent typology for how anticipatory learning occurs. We show how each type of anticipatory learning is triggered and uniquely influences search and solutions. We also detail how anticipatory learning is similar to, but different than, learning from actual negative outcomes. A central contribution of this study is setting forth anticipatory learning as a primary form (versus a special case) of learning in most organizations. We conclude by identifying implications for organization theory and strategy. 
Chen and Thompson on the replacement of founder CEOs |SEJ Video AbstractNew Firm Performance and the Replacement of Founder-CEOs
Jing Chen; Peter Thompson
We study the causes and consequences of the replacement of founder-CEOs in a sample of 4,172 Danish start-ups. We propose that founder-CEO replacement is driven in part by mismatches between business quality and founder ability. Our framework suggests that replacements are more likely among the worst- and best-performing firms, with low (high)-ability founders replaced by manager with higher (lower) ability. Replacement is not unambiguously associated with better subsequent performance. Firms that replaced the founder were much more likely to fail, but the surviving firms among them grew considerably faster. Our empirical results are consistent with these proposed predictions.
Saxton, Wesley, & Saxton on "Venture Advocates" |SEJ Video AbstractVenture Advocate Behaviors and the Emerging Enterprise
Todd Saxton; Curtis L. Wesley II,M. Kim Saxton
Founders of new ventures need to understand the factors that encourage others to give them the help they need for their new firms to survive and grow—what we call venture advocate behaviors (VABs). A new firm that enables these VABs is able to access resources without a monetary burden because they are activated through social exchanges. In order to enable VABs, founders need to understand the individual characteristics of potential advocates, how they will assess the likelihood of success of the new venture, and the decision rules they will use, such as reciprocity, building socioemotional wealth, and the positive identification the potential advocate has within the local venture ecosystem.
Creating and Capturing Value From Freemium Business Models |SEJ Video AbstractCreating and capturing value from freemium business models: A demand-side perspective
Joost Rietveld
Freemium business models are increasingly prevalent in the digital economy, yet very little is known about how freemium affects consumers' perceptions of value and their willingness-to-pay. In this article, I study how the freemium business model competes with the premium business model in the market for digital PC games. Results show that freemium games are played less and generate less revenues than premium games and that greater variety in games' menus of paid items is associated with higher revenues. This implies that in order to achieve competitive parity with firms operating the premium business model, firms operating the freemium business model need to create more value (e.g., through improved product quality, income from advertisements, or unlocking network externalities) or operate at lower costs.
Accelerator expertise: Understanding the role of accelerators in Bangalore entrepreneurial ecosystem |SEJ Video AbstractAccelerator expertise: Understanding the intermediary role of accelerators in the development of the Bangalore entrepreneurial ecosystem
Ketan Goswami; J. Robert Mitchell, Suresh Bhagavatula
Accelerators are a new form of entrepreneurial support organization. These organizations typically focus on developing individual start-ups, but we find that they also help develop entrepreneurial ecosystems. They do so by acting as a bridge between start-ups and the broader entrepreneurial environmental resources by: (a) helping form connections, (b) helping develop individual start-ups, (c) helping coordinate the right match among the various players in the ecosystem, and (d) helping select mentors and founders with the appropriate motivation and knowledge. As these accelerators apply this expertise in this go-between role, they help build commitment to the broader ecosystem. Furthermore, they enable success (or fast failure) of individual start-ups and do so in a way that develops the overall entrepreneurial capacity of the broader entrepreneurial ecosystem.
Are Formal Planners More Likely To Achieve New Venture Viability? |SEJ Video AbstractAre Formal Planners More Likely To Achieve New Venture Viability? A Counterfactual Model And Analysis
Christian Hopp; Francis J. Greene
This study assesses whether founders who write formal plans are more likely to achieve new venture viability. This is important because, despite its popularity, there is considerable debate about the value of plans. One root reason for this is that what prompts a founder to plan also impacts his/her chances of creating a viable new venture. The study's novelty is to separate out influences on the decision to plan from the plan-venture viability relationship. Our results show that better-educated founders, those wanting to grow and innovate, and those needing external finance are more likely to plan. Subsequently, having isolated what prompts planning, we assess if writing a plan actually promotes venture viability. We find that it pays to plan. 
Founder–inventors and their investors: Spurring firm survival and growth |SEJ Video AbstractFounder–inventors and their investors: Spurring firm survival and growth
Carolin Haeussler; Maria Hennicke, Elisabeth Mueller
The role of founders and founder competences is critical as firms progress along their life cycles, whereby founders face decisions about which tasks deserve their attention and which ones they can delegate to their employees, middle-management, and/or new hires. One key strategic choice for founders is whether to engage in inventive activities themselves and remain engaged. Based on a large firm dataset, we find that founders' inventive activities spur survival and growth. Furthermore, venture capital investors leverage the effect on growth because they often bring in their own industry expertise, turn attention to the core capabilities, and revitalize the top management team. These investor activities enable founders to focus their attention on areas in which their involvement best supports the firm's performance, namely inventive activities.
Collaboration and informal hierarchy in innovation teams |SEJ Video AbstractCollaboration and informal hierarchy in innovation teams: Product introductions in entrepreneurial ventures
Amrita Lahiri; Emily C. Pahnke, Michael D. Howard, Warren Boeker
Designing an innovation team can be challenging for new ventures. While the presence of a technologically proficient founder or highly accomplished inventor can significantly bolster a new venture's innovation efforts, our results indicate that these roles must be carefully managed to prevent conflicts between them. Our findings suggest that founders who hire star inventors should establish a clear hierarchy of decision-making within innovation teams, while also offering greater autonomy to the star inventor in matters concerning innovation leadership and product development. We also suggest that it may be advantageous for founders to hire star inventors with prior experience working in new ventures as opposed to older, established organizations. Overall, our study indicates that new ventures need to exercise caution in hiring and managing star employees.
A fresh look at patterns and assumptions in the field of entrepreneurship |SEJ Video AbstractA fresh look at patterns and assumptions in the field of entrepreneurship: What can we learn?
Gary Dushnitsky; Sharon F. Matusik
Has the entrepreneurial journey remained unchanged over the past decades? And if there have been substantive changes, what are they? And what are their implications? These are critical questions that talk to entrepreneurship scholars and practitioners alike. The purpose of this article is to encourage a dialogue among and across the two groups. We present dual theory-practitioner conversations around three points of dialogue; the origin of entrepreneurial opportunity, organizing and scaling, and resource acquisition. In each case, we show that drawing on both the practice and academic community is important in identifying the value of extant theories and frameworks and where there are important opportunities for new frameworks and predictions. We believe that this kind of theory-practitioner dialogue offers invaluable guidance to further advance our field.
Simultaneous Experimentation as a Learning Strategy | 2019 SEJ Best Paper PrizeSimultaneous Experimentation as a Learning Strategy: Business Model Development Under Uncertainty
Petra Andries; Koenraad Debackere, Bart van Looy
Ventures operating under uncertainty face challenges defining a sustainable value proposition. Six longitudinal case studies reveal two approaches to business model development: focused commitment and simultaneous experimentation. While focused commitment positively affects initial growth, this commitment and lack of variety jeopardize long-term survival. Simultaneous experimentation implies lower initial growth levels, but facilitates long-term survival by enacting variety in a resource-effective manner. This article enriches organizational learning theory by demonstrating that not only distant search but also simultaneous experimentation results in variety. Moreover, simultaneous experimentation implies effectual behavior and reconciles the apparent juxtaposition between ‘action’ and ‘planning.’
Navigating the emerging market context | SEJ Video AbstractNavigating the emerging market context: Performance implications of effectuation and causation for small and medium enterprises during adverse economic conditions in Russia
Oleksiy Osiyevskyy; Galina Shirokova, Anastasiia Laskovaia, Hossein MahdaviMazdeh
Entrepreneurial actions can be based on one of two behavioral logics: causation (rigorous forward-looking analysis, relying on well-prepared plans, pre-defined goals, and required resources) or effectuation (leveraging the existing resources and controlling the environmental uncertainty through creating new markets, products, and opportunities). We investigate the effectiveness of these logics for Russian SMEs navigating adversity in the emerging market context. The results suggest that causation leads to performance improvements, yet these become marginal and highly unreliable if a firm finds itself in adverse conditions. Effectuation, on the other hand, is a costly and unreliable strategy in stable times, yet leads to reliable performance improvements in volatile contexts.
Interview with 2019 Best Video Abstract Award Winners Carolin Häussler and Elisabeth Mueller |SEJ Video AbstractFounder–inventors and their investors: Spurring firm survival and growth
Carolin Haeussler; Maria Hennicke, Elisabeth Mueller
The role of founders and founder competences is critical as firms progress along their life cycles, whereby founders face decisions about which tasks deserve their attention and which ones they can delegate to their employees, middle-management, and/or new hires. One key strategic choice for founders is whether to engage in inventive activities themselves and remain engaged. Based on a large firm dataset, we find that founders' inventive activities spur survival and growth. Furthermore, venture capital investors leverage the effect on growth because they often bring in their own industry expertise, turn attention to the core capabilities, and revitalize the top management team. These investor activities enable founders to focus their attention on areas in which their involvement best supports the firm's performance, namely inventive activities.
Amphibious entrepreneurs and the emergence of organizational forms | 2020 SEJ 2020 Best Paper PrizeAmphibious entrepreneurs and the emergence of organizational forms
Walter W. Powell; Kurt W. Sandholtz
We study the emergence of organizational forms, focusing on two mechanisms—reconfiguration and transposition—that distinguish the founding models of the first 26 biotechnology companies, all created in the industry's first decade, from 1972 to 1981. We analyze rich archival data using hierarchical cluster analysis, revealing four organizational variants of the dedicated biotech firm (DBF). Three were products of reconfiguration, as executives from Big Pharma used past practices to incorporate new science. One DBF variant resulted from ‘amphibious’ scientists who imported organizing ideas from the academy into their VC-funded start-ups. We argue that such transpositions are fragile, yet charged with generative possibilities.
The Track One Pilot Program: Who Benefits from Prioritized Patent Examination? | SEJ Video AbstractThe Track One Pilot Program: Who benefits from prioritized patent examination?
Mike H. M. Teodorescu; Jeffrey M. Kuhn
Patents are essential to high-tech businesses, helping them to secure funding and exclude competitors from the marketplace. We evaluate a USPTO pilot program that allowed patent applicants to accelerate patent examination, yielding a patent in less than 1 year when typically 3 or more years are required. We find that entrepreneurs are more likely to use the program than large firms. Moreover, patents examined under the program tend to be strategically important. They are litigated and cited at higher rates than other patents, and the scope of the patents' claims plays a key role in these outcomes. Collectively our results suggest that multi-track patent examination programs are likely to have a positive effect on generating new ideas, increasing value capture for entrepreneurs, and facilitating the growth of small businesses. Our results also suggest that the USPTO has implemented the program successfully by accelerating examination without sacrificing quality.
Entrepreneurial Strategies During Institutional Changes | SEJ Video AbstractEntrepreneurial strategies during institutional changes: Evidence from China's economic transition
You (Willow) Wu; Charles E. Eesley, Delin Yang
Institutional environments influence the effectiveness of entrepreneurial strategies. How should entrepreneurs adopt different strategies at different stages of an institutional change? We tackle this question by examining China's transition from a planned economy to a market economy. Using data from an alumni survey in China, we find that relationship-based strategies promote firm growth in the early stage, innovation-based strategies appear more effective in the late stage, and locating in science parks benefits firm growth in the intermediate stage. Overall, our study implies that entrepreneurs should adopt different strategies to fit different types of institutional environments. Also, our study provides implications to policymakers that cocoon institutions, such as science parks, may be temporarily effective during the intermediate stage of an institutional change.
High-Performer Mobility to Entrepreneurship and Parent-Firm Performance |SEJ Video AbstractHigh-performer mobility to entrepreneurship and parent-firm performance
Pernille Gjerløv-Juel; Michael S. Dahl
Industry experience is critical for new venture performance, and spinoff entrepreneurs (former employees from the same industry) perform better than other start-ups. However, studies have found that high performers' mobility to spinoffs harms the performance of their former employers. This paper asks when do spinoffs result in increasing competition and when is spinoff entrepreneurship more harmful compared to other types of high performer mobility? We show that additional detrimental performance effects on former employers depend on employee tenure and the spinoffs' start-up size. We argue that longer tenure increases competition because it allows the employee to form and strengthen personal relations, for example, to customers, and to accumulate more knowledge on products and processes. Start-up size is important for the recreation and appropriation of this knowledge.