Founding scale and survival: double-edged effects of corporate sponsorship

Hsien-Jui Chung, Hsuan Lo and Chun-Chung Chen

The Service Industries Journal, 2009, vol. 31, issue 6, 997-1009

Abstract: This study examines the effects of founding scale on survival rates across independent and corporate-sponsored Taiwan securities firms. Empirical results confirm the positive effects of founding scale and corporate sponsorship on new venture survival. Results also indicate that when founding scale is large, corporate-sponsored new ventures have higher survival rates than independent ventures. However, when founding scale is smaller, the reverse is true: corporate-sponsored new ventures have lower survival rates than independent ventures. Therefore, corporate sponsorship comes off as a double-edged sword; new ventures may benefit from the parent's existent resources and social linkages, but also suffer from a loss of autonomy and control over major decisions.

Date: 2009
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DOI: 10.1080/02642060903079113

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The Service Industries Journal is currently edited by Eileen Bridges, Professor Domingo Ribeiro, Ronald Goldsmith, Barry Howcroft and Youjae Yi

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