Who Do Start‐Up Firms Imitate? A Study of New Market Entries in the CLEC Industry

Richard J. Gentry, Thomas Dalziel and Mark A. Jamison

Journal of Small Business Management, 2013, vol. 51, issue 4, 525-538

Abstract: Institutional theory contends firms imitate other firms with ideal traits, whereas the strategic groups literature on imitation suggests firms imitate similar firms. We address this debate by studying 1,067 market entries by founder‐managed start‐ups in the U.S. Competitive Local Exchange Carrier industry from 1996 to 2004. In support of the strategic groups literature, start‐ups imitate entry decisions of and gravitate toward markets that are densely populated by other start‐ups. Though start‐ups avoid markets already densely populated by corporate ventures, they imitate the market entries of corporate ventures. Our discussion of these and other findings provide insights for start‐ups navigating new industries.

Date: 2013
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DOI: 10.1111/jsbm.12055

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