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Innovation, Managerial Effort, and Start-Up Performance


  • W. David Allen

    (University of Alabama - Huntsville)

  • Thomas W. Hall

    (Christopher Newport University)


Managers of start-up firms make a number of important yet understudied decisions, such as whether or not to develop a new product, whether or not to choose a high-technology product or service, whether or not to use external assistance, and the amount of time and effort they will devote to their new company. These choices are informed by their access to various resources, such as the size of the management team, its education level, its previous experience working at start-ups, and other attributes. In this paper we consider how these resources influence optimal provision of effort, and examine decisions about innovative behavior (i.e., to market a novel or high-technology product) and managerial exertion (i.e., the hours per week spent by the managers and their decision to supplement their own efforts by employing external assistance such as consulting services).

Suggested Citation

  • W. David Allen & Thomas W. Hall, 2007. "Innovation, Managerial Effort, and Start-Up Performance," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 12(2), pages 87-118, Fall.
  • Handle: RePEc:pep:journl:v:12:y:2007:i:2:p:87-118

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    References listed on IDEAS

    1. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-559, November.
    2. Catherine Casamatta, 2003. "Financing and Advising: Optimal Financial Contracts with Venture Capitalists," Journal of Finance, American Finance Association, vol. 58(5), pages 2059-2086, October.
    3. Chrisman, James J. & Hoy, Frank & Robinson, Richard Jr., 1987. "New venture development: The costs and benefits of public sector assistance," Journal of Business Venturing, Elsevier, vol. 2(4), pages 315-328.
    4. Daniel Evans & Thierry Volery, 2001. "Online business development services for entrepreneurs: an exploratory study," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 13(4), pages 333-350, October.
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    More about this item


    Startup; Start-up; Managerial Effort;

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty


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