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What Do I Take With Me?: The Mediating Effect Of Spin-Out Team Size And Tenure On The Founder-Firm Performance Relationship

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Listed:
  • Rajshree Agarwal
  • Benjamin A. Campbell
  • April M. Franco
  • Martin Ganco

Abstract

Our study examines the mediating effect of spin-out team characteristics on the relationship between founder quality and parent and spin-out performance. Since the ability to transfer or recreate complementary assets is a critical determinant of performance, we theorize and show that founders with greater ability impact both parent firm and spin-out performance by assembling teams that represent strong complementary human capital. Using linked employee-employer US Census data from the legal services industry, we find founding team size and tenure mediate the founder quality effect. Our findings have practical implications for both managers of existing firms and aspiring founders as it relates to their human resource strategies: the factor most salient to performance is not the individual quality per se, but the manner in which it impacts the transfer and spillover of complementary human capital.

Suggested Citation

  • Rajshree Agarwal & Benjamin A. Campbell & April M. Franco & Martin Ganco, 2013. "What Do I Take With Me?: The Mediating Effect Of Spin-Out Team Size And Tenure On The Founder-Firm Performance Relationship," Working Papers 13-17, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:13-17
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    File URL: https://www2.census.gov/ces/wp/2013/CES-WP-13-17.pdf
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    1. Benjamin F. Jones, 2009. "The Burden of Knowledge and the "Death of the Renaissance Man": Is Innovation Getting Harder?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 283-317.
    2. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
    3. Luis Garicano, 2000. "Hierarchies and the Organization of Knowledge in Production," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 874-904, October.
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    Cited by:

    1. Christopher Goetz & Henry Hyatt & Erika McEntarfer & Kristin Sandusky, 2016. "The Promise and Potential of Linked Employer-Employee Data for Entrepreneurship Research," NBER Chapters, in: Measuring Entrepreneurial Businesses: Current Knowledge and Challenges, pages 433-462, National Bureau of Economic Research, Inc.
    2. Florence Honore, 2014. "From Common Ground To Breaking New Ground: Founding Team's Prior Shared Experience And Start-Up Performance," Working Papers 14-39, Center for Economic Studies, U.S. Census Bureau.
    3. Agarwal, Rajshree & Shah, Sonali K., 2014. "Knowledge sources of entrepreneurship: Firm formation by academic, user and employee innovators," Research Policy, Elsevier, vol. 43(7), pages 1109-1133.

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