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Entrepreneurial Spawning and Firm Characteristics

Pierre Mella-Barral, Michel A. Habib () and Ulrich Hege

No 984, HEC Research Papers Series from HEC Paris

Abstract: We analyze the implications of the decision to spawn or to retain a new product for the nature and evolution of the firm. In our model, a new product is spawned if the fit between the product and its parent firm organization is not adequate. We focus on the impact of the firm's history of spawning decisions on firm characteristics such as size, focus, profitability, and innovativeness, and analyze its role in shaping firm dynamics. In accordance with the empirical literature, our model predicts that older firms innovate less, spawn less, are more diversified and less profitable, and that firms with more valuable general or specialized resources innovate and spawn more. Echoing seemingly contradictory empirical findings, our model predicts that small, focused firms (large, diversified firms) innovate and spawn more, and are more profitable when sample heterogeneity is driven by the importance of organizational fit (the value of general resources)

Keywords: spawning; spinoffs; spinouts; general and specialized resources; firm organization; organizational fit; firm size; focus; profitability; innovativeness; spawning dynamics (search for similar items in EconPapers)
JEL-codes: L25 M13 O31 O33 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2013-03-01
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ino, nep-sbm and nep-tid
References: Add references at CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Entrepreneurial Spawning and Firm Characteristics (2013) Downloads
Working Paper: Entrepreneurial Spawning and Firm Characteristics (2013)
Working Paper: Entrepreneurial Spawning and Firm Characteristics (2011) Downloads
Working Paper: Entrepreneurial Spawning and Firm Characteristics (2011) Downloads
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