IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v53y2007i2p169-177.html
   My bibliography  Save this article

Size Really Matters--New Insights for Start-ups' Survival

Author

Listed:
  • Ornit Raz

    (Sloan School of Management, Massachusetts Institute of Technology, E40-339, 77 Massachusetts Avenue, Cambridge, Massachusetts 02139-4307)

  • Peter A. Gloor

    (Sloan School of Management, Massachusetts Institute of Technology, E40-339, 77 Massachusetts Avenue, Cambridge, Massachusetts 02139-4307)

Abstract

This paper presents new evidence regarding a firm's probability for survival, based on the network structure of the firm's managers. We found that start-ups that have larger informal communication networks increased their chance to survive external shock. Original data have been collected from Israeli software start-ups during the dot-com economic growth. About eight years later, we added information about their ability to survive the burst of the dot-com bubble. From a theoretical point of view, this paper highlights the power of the classic social networks approach in explaining organizational performance. From a practical point of view, these findings offer some guidelines for managers of start-ups. Our results show that the size of informal interfirm networks really matters.

Suggested Citation

  • Ornit Raz & Peter A. Gloor, 2007. "Size Really Matters--New Insights for Start-ups' Survival," Management Science, INFORMS, vol. 53(2), pages 169-177, February.
    • Handle: RePEc:inm:ormnsc:v:53:y:2007:i:2:p:169-177
    DOI: 10.1287/mnsc.1060.0609
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.1060.0609
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.1060.0609?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Joel A. C. Baum & Tony Calabrese & Brian S. Silverman, 2000. "Don't go it alone: alliance network composition and startups' performance in Canadian biotechnology," Strategic Management Journal, Wiley Blackwell, vol. 21(3), pages 267-294, March.
    2. Evans, David S, 1987. "The Relationship between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 567-581, June.
    3. Clayton M. Christensen & Fernando F. Suárez & James M. Utterback, 1998. "Strategies for Survival in Fast-Changing Industries," Management Science, INFORMS, vol. 44(12-Part-2), pages 207-220, December.
    4. Daniel Carpenter & Kevin Esterling & David Lazer, 2003. "The Strength of Strong Ties," Rationality and Society, , vol. 15(4), pages 411-440, November.
    5. Fernando F. Suárez & James M. Utterback, 1995. "Dominant designs and the survival of firms," Strategic Management Journal, Wiley Blackwell, vol. 16(6), pages 415-430.
    6. Manuel Trajtenberg, 2000. "R&D Policy in Israel: An Overview and Reassessment," NBER Working Papers 7930, National Bureau of Economic Research, Inc.
    7. Christine Moorman & Rex Du & Carl F. Mela, 2005. "The Effect of Standardized Information on Firm Survival and Marketing Strategies," Marketing Science, INFORMS, vol. 24(2), pages 263-274, September.
    8. Ranjay Gulati & Monica C. Higgins, 2003. "Which ties matter when? the contingent effects of interorganizational partnerships on IPO success," Strategic Management Journal, Wiley Blackwell, vol. 24(2), pages 127-144, February.
    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. Kim, Jungho & Lee, Chang-Yang, 2016. "Technological regimes and firm survival," Research Policy, Elsevier, vol. 45(1), pages 232-243.
    2. Shanling Li & Jennifer Shang & Sandra A. Slaughter, 2010. "Why Do Software Firms Fail? Capabilities, Competitive Actions, and Firm Survival in the Software Industry from 1995 to 2007," Information Systems Research, INFORMS, vol. 21(3), pages 631-654, September.
    3. Cefis, Elena & Marsili, Orietta, 2006. "Survivor: The role of innovation in firms' survival," Research Policy, Elsevier, vol. 35(5), pages 626-641, June.
    4. Cecere, Grazia & Corrocher, Nicoletta & Battaglia, Riccardo David, 2015. "Innovation and competition in the smartphone industry: Is there a dominant design?," Telecommunications Policy, Elsevier, vol. 39(3), pages 162-175.
    5. Najda-Janoszka, Marta, 2017. "Industry Transition - Challenges for Value Capture," MPRA Paper 81919, University Library of Munich, Germany.
    6. Kathleen Eisenhardt, 2013. "Top management teams and the performance of entrepreneurial firms," Small Business Economics, Springer, vol. 40(4), pages 805-816, May.
    7. Maurer, Joshua D. & Creek, Steven A. & Allison, Thomas H. & Bendickson, Joshua S. & Sahaym, Arvin, 2023. "Affiliation rhetoric and digital orientation in crowdfunding appeals," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    8. Czarnitzki, Dirk & Hottenrott, Hanna, 2012. "Collaborative R&D as a strategy to attenuate financing constraints," ZEW Discussion Papers 12-049, ZEW - Leibniz Centre for European Economic Research.
    9. Elena Cefis & Orietta Marsili, 2005. "A matter of life and death: innovation and firm survival," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 14(6), pages 1167-1192, December.
    10. Milanov, Hana & Fernhaber, Stephanie A., 2009. "The impact of early imprinting on the evolution of new venture networks," Journal of Business Venturing, Elsevier, vol. 24(1), pages 46-61, January.
    11. Eisingerich, Andreas B. & Bell, Simon J. & Tracey, Paul, 2010. "How can clusters sustain performance? The role of network strength, network openness, and environmental uncertainty," Research Policy, Elsevier, vol. 39(2), pages 239-253, March.
    12. Manuela N. Hoehn-Weiss & Samina Karim & Chi-Hyon Lee, 2017. "Examining Alliance Portfolios Beyond the Dyads: The Relevance of Redundancy and Nonuniformity Across and Between Partners," Organization Science, INFORMS, vol. 28(1), pages 56-73, February.
    13. Fang, Yiwei & Francis, Bill & Hasan, Iftekhar & Wang, Haizhi, 2012. "Product market relationships and cost of bank loans: Evidence from strategic alliances," Journal of Empirical Finance, Elsevier, vol. 19(5), pages 653-674.
    14. Rahul Kapoor & Nathan R. Furr, 2015. "Complementarities and competition: Unpacking the drivers of entrants' technology choices in the solar photovoltaic industry," Strategic Management Journal, Wiley Blackwell, vol. 36(3), pages 416-436, March.
    15. Castro, Ignacio & Casanueva, Cristóbal & Galán, José Luis, 2014. "Dynamic evolution of alliance portfolios," European Management Journal, Elsevier, vol. 32(3), pages 423-433.
    16. Haeussler, Carolin & Patzelt, Holger & Zahra, Shaker A., 2012. "Strategic alliances and product development in high technology new firms: The moderating effect of technological capabilities," Journal of Business Venturing, Elsevier, vol. 27(2), pages 217-233.
    17. Durand, Rodolphe & Coeurderoy, Regis, 2001. "Age, order of entry, strategic orientation, and organizational performance," Journal of Business Venturing, Elsevier, vol. 16(5), pages 471-494, September.
    18. Meuleman, Miguel & De Maeseneire, Wouter, 2012. "Do R&D subsidies affect SMEs’ access to external financing?," Research Policy, Elsevier, vol. 41(3), pages 580-591.
    19. Wijnberg, Nachoem M., 2011. "Classification systems and selection systems: The risks of radical innovation and category spanning," Scandinavian Journal of Management, Elsevier, vol. 27(3), pages 297-306, September.
    20. Cefis, Elena & Marsili, Orietta, 2012. "Going, going, gone. Exit forms and the innovative capabilities of firms," Research Policy, Elsevier, vol. 41(5), pages 795-807.

    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:inm:ormnsc:v:53:y:2007:i:2:p:169-177. 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: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    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.