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

Author

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  • Majbritt Rostgaard Evald
  • Ann Hojbjerg Clarke
  • Kent Wickstrom Jensen

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.

Suggested Citation

  • Majbritt Rostgaard Evald & Ann Hojbjerg Clarke & Kent Wickstrom Jensen, 2009. "Do direct or indirect relations between incumbent firms and corporate spin-offs affect the performance of spin-offs?," International Journal of Entrepreneurial Venturing, Inderscience Enterprises Ltd, vol. 1(2), pages 147-163.
    • Handle: RePEc:ids:ijeven:v:1:y:2009:i:2:p:147-163
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    Cited by:

    1. Pearce, John A. & Patel, Pankaj C., 2022. "Reaping the financial and strategic benefits of a divestiture by spin-off," Business Horizons, Elsevier, vol. 65(3), pages 291-301.
    2. K. Poehlmann & R. Helm & O. Mauroner & J. Auburger, 2021. "Corporate spin-offs’ success factors: management lessons from a comparative empirical analysis with research-based spin-offs," Review of Managerial Science, Springer, vol. 15(6), pages 1767-1796, August.
    3. Johan Bruneel & Els Van de Velde & Bart Clarysse, 2013. "Impact of the Type of Corporate Spin–Off on Growth," Entrepreneurship Theory and Practice, , vol. 37(4), pages 943-959, July.

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