[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/aal/abbswp/05-01.html
   My bibliography  Save this paper

Are you experienced? Prior experience and the survival of new organizations

Author

Listed:
  • Michael S. Dahl
  • Toke Reichstein
Abstract
This paper investigates the relationship between the level of experience of managers and founders, and the likelihood of survival of their new firms. We take advantage of a comprehensive dataset covering the entire Danish labor market from 1980-2000. This is used to trace the activities of top ranked members of start-ups prior to their founding, and follow the fate of these firms. More specifically, we compare the survival of spin-offs from surviving parents, spin-offs from exiting parents, and other start-ups. Moreover, we investigate whether firms managed and founded by more experienced teams with higher levels of industry-specific experience are more likely to survive. Distinguishing between survivors and firms that have been acquired, we find that spin-offs from a surviving parent company combined with and industry-specific experience, positively affects the likelihood of survival. We also find that spin-offs from parent companies that exit are less likely to survive than either spin-offs from surviving parents or other start-ups. These findings support the theoretical arguments that organizational heritage is important for the survival of new organizations. We found no similar significant results when comparing exits with firms that have been acquired.

Suggested Citation

  • Michael S. Dahl & Toke Reichstein, 2005. "Are you experienced? Prior experience and the survival of new organizations," DRUID Working Papers 05-01, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    • Handle: RePEc:aal:abbswp:05-01
    as

    Download full text from publisher

    File URL: https://wp.druid.dk/wp/20050001.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Karen A. Bantel & Susan E. Jackson, 1989. "Top management and innovations in banking: Does the composition of the top team make a difference?," Strategic Management Journal, Wiley Blackwell, vol. 10(S1), pages 107-124, June.
    2. Constance E. Helfat & Marvin B. Lieberman, 2002. "The birth of capabilities: market entry and the importance of pre-history," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(4), pages 725-760, August.
    3. Alan I. Murray, 1989. "Top management group heterogeneity and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 10(S1), pages 125-141, June.
    4. Bingley, Paul & Westergaard-Nielsen, Niels, 2004. "Personnel policy and profit," Journal of Business Research, Elsevier, vol. 57(5), pages 557-563, May.
    5. Klepper, Steven, 2001. "Employee Startups in High-Tech Industries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 10(3), pages 639-674, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eriksson, Tor & Moritz Kuhn, Johan, 2006. "Firm spin-offs in Denmark 1981-2000 -- patterns of entry and exit," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 1021-1040, September.
    2. Nicholas A. Athanassiou & Kendall Roth, 2006. "International experience heterogeneity effects on top management team advice networks: A hierarchical analysis," Management International Review, Springer, vol. 46(6), pages 749-770, December.
    3. Boeker, Warren & Howard, Michael D. & Basu, Sandip & Sahaym, Arvin, 2021. "Interpersonal relationships, digital technologies, and innovation in entrepreneurial ventures," Journal of Business Research, Elsevier, vol. 125(C), pages 495-507.
    4. A. Bonaccorsi & S. Giannangeli, 2010. "One or more growth processes? Evidence from new Italian firms," Small Business Economics, Springer, vol. 35(2), pages 137-152, September.
    5. Hsu, David H., 2007. "Experienced entrepreneurial founders, organizational capital, and venture capital funding," Research Policy, Elsevier, vol. 36(5), pages 722-741, June.
    6. Zhou, Yifan & Kara, Alper & Molyneux, Philip, 2019. "Chair-CEO generation gap and bank risk-taking," The British Accounting Review, Elsevier, vol. 51(4), pages 352-372.
    7. Enrico Santarelli & Marco Vivarelli, 2007. "Entrepreneurship and the process of firms’ entry, survival and growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 16(3), pages 455-488, June.
    8. Francesco Quatraro & Marco Vivarelli, 2015. "Drivers of Entrepreneurship and Post-entry Performance of Newborn Firms in Developing Countries," The World Bank Research Observer, World Bank, vol. 30(2), pages 277-305.
    9. Luca Stanca & Herbert Dawid & Mariacristina Piva & Marco Vivarelli, 2015. "Are R&D investments by incumbents decreasing in the availability of complementary assets for start-ups?," LEM Papers Series 2015/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    10. Anastasia Bruno & Andrea Furlan & Serafino Pitingaro, 2015. "Manifattura e nuova imprenditorialit? in veneto," ECONOMIA E SOCIET? REGIONALE, FrancoAngeli Editore, vol. 0(1), pages 102-124.
    11. Pernille Gjerløv-Juel & Michael S. Dahl, 2012. "Spin-off Growth and Job Creation: Evidence on Denmark," Chapters, in: Guido Buenstorf (ed.), Evolution, Organization and Economic Behavior, chapter 10, Edward Elgar Publishing.
    12. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    13. Pamela Adams & Roberto Fontana & Franco Malerba, 2022. "Knowledge resources and the acquisition of spinouts," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(2), pages 277-313, June.
    14. van Olffen, W. & Boone, C.A.J.J., 1997. "The confusing state of the art in top management composition studies: A theoretical and empirical review," Research Memorandum 011, Maastricht University, Netherlands Institute of Business Organization and Strategy Research (NIBOR).
    15. Díaz-Fernández, M. Carmen & González-Rodríguez, M. Rosario & Simonetti, Biagio, 2015. "Top management team’s intellectual capital and firm performance," European Management Journal, Elsevier, vol. 33(5), pages 322-331.
    16. Zheng, Yanfeng & Liu, Jing & George, Gerard, 2010. "The dynamic impact of innovative capability and inter-firm network on firm valuation: A longitudinal study of biotechnology start-ups," Journal of Business Venturing, Elsevier, vol. 25(6), pages 593-609, November.
    17. Cho, Theresa S., 2006. "The effects of executive turnover on top management team's environmental scanning behavior after an environmental change," Journal of Business Research, Elsevier, vol. 59(10-11), pages 1142-1150, October.
    18. Guido Buenstorf & Dominik P. Heinisch, 2020. "Science and industry evolution: evidence from the first 50 years of the German laser industry," Small Business Economics, Springer, vol. 54(2), pages 523-538, February.
    19. Michael S. Dahl & Christian Ø.R. Pedersen & Bent Dalum, 2003. "Entry by Spinoff in a High-tech Cluster," DRUID Working Papers 03-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    20. Michael S. Dahl & Christian Ø.R. Pedersen & Bent Dalum, 2005. "Entrepreneurial Founder Effects in the Growth of Regional Clusters How Early Success is a Key Determinant," DRUID Working Papers 05-18, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.

    More about this item

    Keywords

    Organizational routine; Industry-specific experience; Survival of new firms; Spin-offs;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aal:abbswp:05-01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Keld Laursen (email available below). General contact details of provider: https://www.druid.dk/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.