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Linking vertically related industries: entry by employee spinouts across industry boundaries

Author

Listed:
  • Pamela Adams
  • Roberto Fontana
  • Franco Malerba

Abstract

This article examines vertical spinouts, defined as new and independent ventures founded by the ex-employees of established firms in either an upstream or a downstream industry. These spinouts represent a type of organizational structure through which knowledge is shared and transferred between vertically related industries. We propose that a key determinant of both their formation and their successful performance is the contextual knowledge that they inherit from their pre-entry experience in a vertically related industry. We examine spinout entry and performance in three vertically related industries over a 10-year period: semiconductors, telecommunications equipment, and telecommunications networks/connectivity. Our results show that vertical spinouts constitute a significant share of startups in these related industries and that they are more likely to survive than other de novo entrants. We discuss the implications of our findings for the literatures on entrepreneurship and industry dynamics.

Suggested Citation

  • Pamela Adams & Roberto Fontana & Franco Malerba, 2019. "Linking vertically related industries: entry by employee spinouts across industry boundaries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(3), pages 529-550.
    • Handle: RePEc:oup:indcch:v:28:y:2019:i:3:p:529-550.
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    File URL: http://hdl.handle.net/10.1093/icc/dtz014
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    Citations

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    Cited by:

    1. 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.
    2. Matteo Landoni & dt ogilvie, 2022. "In Search of the Spin-Out Entrepreneur," JOItmC, MDPI, vol. 8(3), pages 1-17, June.
    3. Kim, Jungho & Kollmann, Trevor & Palangkaraya, Alfons & Webster, Elizabeth, 2022. "Does local technological specialisation, diversity and dynamic competition enhance firm creation?," Research Policy, Elsevier, vol. 51(7).
    4. Monia Lougui & Anders Broström, 2021. "New firm formation in the wake of mergers and acquisitions: An exploration of push and pull factors," Journal of Evolutionary Economics, Springer, vol. 31(1), pages 65-89, January.
    5. Carla Costa & Rui Baptista, 2023. "Knowledge inheritance and performance of spinouts," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(1), pages 29-55, March.

    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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