Do direct or indirect relations between incumbent firms and corporate spin-offs affect the performance of spin-offs?

Majbritt Rostgaard Evald, Ann Hojbjerg Clarke and Kent Wickstrom Jensen

International Journal of Entrepreneurial Venturing, 2009, vol. 1, issue 2, 147-163

Abstract: This article focuses on the performance of corporate spin-offs. The existing literature agrees that corporate spin-offs perform better than independent start-ups. However, systematic evidence on the subject still seems elusive. We therefore review articles that specifically address the performance of corporate spin-offs. Furthermore, we argue there is a need to distinguish between different types of spin-offs when evaluating their performances relative to independent start-ups. In particular, not all spin-offs have the fortune of access to parts of the resource base of their incumbent firm. We therefore suggest a distinction between whether the spin-off has direct or only indirect relations with their incumbent firm. A Danish sample of 325 companies (spinoffs and independent start-ups) shows that spin-offs in general perform better than independent start-ups. In the group of spin-offs, performance differences also exist. Spin-offs with indirect relations to an incumbent firm perform better than spin-offs with direct relations.

Keywords: corporate spin-offs; divestment spin-offs; entrepreneurial spin-offs; independent start-ups; incumbent firms; direct relations; indirect relations; performance measures; Denmark. (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijeven:v:1:y:2009:i:2:p:147-163

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