 How far from the tree does the (good) apple fall? Spinout creation and the survival of high-tech firmsRoberto Fontana and Lorenzo Zirulia Journal of Economic Behavior & Organization, 2023, vol. 213, issue C, 26-49 Abstract: We develop a model of spinout creation and survival to explain how the initial product market strategies of spinouts may differ with respect to their parent's and how this difference affects their success. We test the model using detailed information on all the entrants in three markets in the Local Area Networking (LAN) industry during the 1990s. Our findings are consistent with the implications of the theoretical model. Concerning spinout generation, the parent firm's technological know-how plays an important role for differentiation. In particular, we find that spinouts tend to imitate ‘average’ parents and ‘keep away from the extremes’ (i.e., parents whose know-how is ‘too close’ or ‘too distant’ with respect to the technological frontier). Concerning spinout survival, we find that more technologically advanced spinouts survive longer and that there is no direct effect of a parent's know-how on spinout's survival. Finally, too much differentiation with respect to the parent firm can be detrimental for spinout success. Keywords: Spinouts; Entry; Product differentiation; Firm survival (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:213:y:2023:i:c:p:26-49 DOI: 10.1016/j.jebo.2023.07.018 Access Statistics for this article Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D. More articles in Journal of Economic Behavior & Organization from Elsevier |
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