Entrepreneurial Spawning and Firm Characteristics

Habib, Michel, Hege, Ulrich and Mella-Barral, Pierre (2013) Entrepreneurial Spawning and Firm Characteristics. Management Science, 59 (12). pp. 2790-2804.

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Official URL: http://tse-fr.eu/pub/30040

Abstract

We analyze the implications of the decision to spawn or to retain a new product for the nature and evolution of the firm. In our model, a new product is spawned if the fit between the product and its parent firm organization is not adequate. We focus on the impact of the firm's history of spawning decisions on firm characteristics such as size, focus, profitability, and innovativeness, and analyze its role in shaping firm dynamics. In accordance with the empirical literature, our model predicts that older firms innovate less, spawn less, are more diversified and less profitable, and that firms with more valuable general or specialized resources innovate and spawn more. Echoing seemingly contradictory empirical findings, our model predicts that small, focused firms (large, diversified firms) innovate and spawn more, and are more profitable when sample heterogeneity is driven by the importance of organizational fit (the value of general resources).

Item Type: Article
Language: English
Date: 2013
Refereed: Yes
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 27 Apr 2016 08:34
Last Modified: 07 Mar 2018 13:23
OAI ID: oai:tse-fr.eu:30040
URI: http://publications.ut-capitole.fr/id/eprint/19337

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