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Entry by Spinoffs

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  • S. Klepper
  • S. Sleeper

Abstract

Entry by spinoffs from incumbent firms is investigated for the laser industry. A model in which spinoffs exploit knowledge from their parents is constructed to explain the types of firms that spawn spinoffs, the market conditions conducive to spinoffs, and the relationship of spinoffs to their parents. The model is tested using detailed data on all laser entrants from the start of the industry through 1994. Our findings support the basic premise of the model that spinoffs inherit knowledge from their parents that shapes their nature at birth. Implications of our findings for organizational behavior, business strategy, entry and industry evolution, and technological change are discussed.

Suggested Citation

  • S. Klepper & S. Sleeper, 2002. "Entry by Spinoffs," Papers on Economics and Evolution 2002-07, Philipps University Marburg, Department of Geography.
    • Handle: RePEc:esi:evopap:2002-07
    Note: The paper will be emailed on request. Please contact evopapers@econ.mpg.de
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