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User-Industry Spinouts: Downstream Industry Knowledge as a Source of New Firm Entry and Survival

Author

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  • Pamela Adams

    () (Franklin University Switzerland, 6924 Sorengo, Switzerland; and CRIOS, Bocconi University, 20136 Milan, Italy)

  • Roberto Fontana

    () (University of Pavia, 27100 Pavia, Italy; and CRIOS, Bocconi University, 20136 Milan, Italy)

  • Franco Malerba

    () (Department of Management and Technology and CRIOS, Bocconi University, 20136 Milan, Italy)

Abstract

Recent scholarship on entrepreneurship suggests that the pre-entry know-how of start-ups, embodied in their founders, affects not only entry, but also performance. Although prior work focuses on new entrants from the focal industry (i.e., employee spinouts) and academic organizations (i.e., university spinoffs), this study identifies and examines a hybrid category of start-ups from downstream user-industries, which we call “user-industry spinouts.” We draw from the literature on evolutionary theory, user innovation, and industrial dynamics to propose that, given the unique combination of knowledge inherited by these entrants, their choices at entry and their ability to survive in the focal industry will differ with respect to other start-ups. We do this by extending existing work on new firm creation to investigate entry and performance in different product markets. Our findings, based on a dataset of start-ups in the semiconductor industry over a 10-year period (1997–2007), show that user-industry spinouts are more likely both to enter and to survive in market-specific product categories. We suggest that the pre-entry knowledge resources of spinouts may support entry and survival across industry boundaries. However, the specific nature of these resources will influence which product markets they choose to enter. Our results have theoretical implications for the literatures on entrepreneurship, industrial dynamics, and strategy.

Suggested Citation

  • Pamela Adams & Roberto Fontana & Franco Malerba, 2016. "User-Industry Spinouts: Downstream Industry Knowledge as a Source of New Firm Entry and Survival," Organization Science, INFORMS, vol. 27(1), pages 18-35, February.
  • Handle: RePEc:inm:ororsc:v:27:y:2016:i:1:p:18-35
    DOI: 10.1287/orsc.2015.1029
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    File URL: http://dx.doi.org/10.1287/orsc.2015.1029
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    References listed on IDEAS

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    Cited by:

    1. Mahka Moeen & Rajshree Agarwal, 2017. "Incubation of an industry: Heterogeneous knowledge bases and modes of value capture," Strategic Management Journal, Wiley Blackwell, vol. 38(3), pages 566-587, March.
    2. Pamela Adams & Roberto Fontana & Astrid Marinoni, 2018. "More “team” than “fame”: spin-off success in the US television sitcom industry," Industrial and Corporate Change, Oxford University Press, vol. 27(6), pages 957-974.
    3. Francesco Lamperti & Franco Malerba & Roberto Mavilia & Giorgio Tripodi, 2019. "Does the Position in the Inter-sectoral Knowledge Space affect the International Competitiveness of Industries?," LEM Papers Series 2019/23, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

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