Through the discovery and exploitation of a natural experiment comprised of a complete industry population, this paper presents empirical evidence challenging widely held beliefs related to intraindustry entrepreneurial spinoffs. Extant spinoff theory holds that knowledge and capabilities are transferred from parent-firms to spinoffs in hereditary fashion, endowing spinoffs with a performance advantage over de novo entrants. Our analysis of all 612 industry entrants, including 448 spinoffs, paints a dramatically different picture. In the context of a complete population, we find that: (a) de novo entrants actually outperform spinoffs; (b) parent-firm quality exerts no discernible influence on spinoff quality; and, (c) founder-specific experience, not parental lineage, is the primary driver of spinoff performance heterogeneity.
Hunt, Richard A. and Lerner, Daniel A.
"REASSESSING THE ENTREPRENEURIAL SPINOFF PERFORMANCE ADVANTAGE: A NATURAL EXPERIMENT INVOLVING A COMPLETE POPULATION,"
Frontiers of Entrepreneurship Research: Vol. 32
, Article 2.
Available at: http://digitalknowledge.babson.edu/fer/vol32/iss12/2