We examine how market overlap with parent organizations impacts the performance of startups founded by the former employees of these incumbent firms. Building on knowledge inheritance and competitive dynamics theories, we propose that the degree to which the operating markets of spinouts overlap with their parent organizations has a curvilinear relationship with their likelihood of survival. Market overlap is beneficial to spinouts because it reduces uncertainty during the early stages of new venture development. However, substantial market overlap may spark hostile actions by the parent organizations, thereby creating disruptive competition that may lower the likelihood of spinouts' survival. Furthermore, we hypothesize that the previous hierarchical position of founders in parent organizations moderates the overlap–performance relationship. Using a sample of European biotech spinouts and their parent firms, we find support for our hypotheses.

Bahoo-Torodi, A., Torrisi, S. (2022). When do spinouts benefit from market overlap with parent firms?. JOURNAL OF BUSINESS VENTURING, 37(6), 1-17 [10.1016/j.jbusvent.2022.106249].

When do spinouts benefit from market overlap with parent firms?

Bahoo-Torodi, Aliasghar;
2022

Abstract

We examine how market overlap with parent organizations impacts the performance of startups founded by the former employees of these incumbent firms. Building on knowledge inheritance and competitive dynamics theories, we propose that the degree to which the operating markets of spinouts overlap with their parent organizations has a curvilinear relationship with their likelihood of survival. Market overlap is beneficial to spinouts because it reduces uncertainty during the early stages of new venture development. However, substantial market overlap may spark hostile actions by the parent organizations, thereby creating disruptive competition that may lower the likelihood of spinouts' survival. Furthermore, we hypothesize that the previous hierarchical position of founders in parent organizations moderates the overlap–performance relationship. Using a sample of European biotech spinouts and their parent firms, we find support for our hypotheses.
2022
Bahoo-Torodi, A., Torrisi, S. (2022). When do spinouts benefit from market overlap with parent firms?. JOURNAL OF BUSINESS VENTURING, 37(6), 1-17 [10.1016/j.jbusvent.2022.106249].
Bahoo-Torodi, Aliasghar; Torrisi, Salvatore
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/997134
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