Re-Examining the Industry Experience–Venture Survival Relationship

Agnes Guenther () and J. Myles Shaver ()
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Agnes Guenther: Department of Entrepreneurship and Strategy, David Eccles School of Business, University of Utah, Salt Lake City, Utah 84112
J. Myles Shaver: Department of Strategic Management and Entrepreneurship, Carlson School of Management, University of Minnesota, Minneapolis, Minnesota 55455

Strategy Science, 2024, vol. 9, issue 1, 79-96

Abstract: We re-examine the finding that new ventures employing individuals with industry experience have survival advantages and conclude that it is unlikely a reflection of the underlying theoretical mechanism advanced in the literature—individuals applying their industry-specific knowledge. We come to this conclusion by leveraging detailed linked employer-employee data from Denmark and conducting an inferred pattern analysis where we analyze several empirical relationships that we interpret in tandem. After replicating the industry experience–venture survival relationship, we identify several empirical puzzles if the underlying causal mechanism is leveraging industry-specific knowledge. In light of these puzzles, analysis of their robustness, and initial exploratory empirical investigations, we propose that other human capital characteristics that correlate with industry experience (i.e., overall experience and wages) are better explanatory factors. The analysis illustrates how the data-grounded steps of an inferred pattern analysis can guide future theoretical development and empirical investigations to identify the causal mechanism underlying a well-established empirical relationship in the literature.

Keywords: new ventures; industry experience; venture survival; industry-specific knowledge; inferred pattern analysis (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orstsc:v:9:y:2024:i:1:p:79-96

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