Are You Experienced? Prior Experience and the Survival of New Organizations
This paper investigates the relationship between the level of pre-entry experience of managers and founders, and the survival of their new firms. Using a comprehensive dataset covering the entire Danish labor market from 1980 to 2000, we are able to trace prior activities of all employees working in all Danish start-ups with at least one employee. We examine whether spin-offs from surviving parents, spin-offs from exiting parents or other start-ups are more likely to survive. Moreover, we investigate whether firms managed and founded by teams with higher levels of industry-specific experience have a higher chance of surviving. We find that spin-offs from a surviving parent and to a lesser degree industry-specific experience positively affects the likelihood of survival. We also find that spin-offs from a parent that exits are less likely to survive than either spin-offs from surviving parents or other start-ups.
Volume (Year): 14 (2007)
Issue (Month): 5 ()
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References listed on IDEAS
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- Bingley, Paul & Westergaard-Nielsen, Niels, 2004. "Personnel policy and profit," Journal of Business Research, Elsevier, vol. 57(5), pages 557-563, May.
- Klepper, Steven, 2001. "Employee Startups in High-Tech Industries," Industrial and Corporate Change, Oxford University Press, vol. 10(3), pages 639-74, September.
- Constance E. Helfat & Marvin B. Lieberman, 2002. "The birth of capabilities: market entry and the importance of pre-history," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 725-760, August.
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