Performance Heterogeneity Among Service-Sector Entrepreneurial Spinoffs

Richard Hunt (rickhunt@vt.edu) and Daniel Lerner
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Daniel Lerner: Deusto Business School, Universidad Deusto

No 2017-05, Working Papers from Colorado School of Mines, Division of Economics and Business

Abstract: In recent years, beliefs about entrepreneurial spinoffs have coalesced around several ``stylized facts,'' including the perspective that knowledge is transferred from parent-firms to progeny in hereditary fashion, such that spinoffs emanating from high-quality parent-firms outperform the spinoffs from low-quality parent-firms. This emerging orthodoxy has found some support in fast- changing and technologically complex sectors, but it is less clear whether parental endowments are a key determinant of operational success in the context of service-oriented sectors, which comprise more 80\% of many developed economies. Through the discovery and analysis of a complete industry population, the results of this study suggest that extant perspectives may not fully account for the extreme heterogeneity of performance that is often exhibited by entrepreneurial spinoffs, especially differences among firms spawned by the same parent. These findings contribute to the ongoing discussion of intra-industry entrepreneurial spinoffs by establishing much-needed boundary conditions and by revealing underlying logics that govern the hereditary transfer of knowledge and capabilities among service sector spinoffs.

Keywords: Entrepreneurial spinoffs; Spinouts; Knowledge transfer; Spillovers; Hereditary endowments; Entrepreneurship; Market entry; New ventures (search for similar items in EconPapers)
Pages: 43 pages
Date: 2017-10
New Economics Papers: this item is included in nep-cse, nep-ent and nep-tid
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http://econbus-papers.mines.edu/working-papers/wp201705.pdf First version, 2017 (application/pdf)

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