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Who lives longer? Startups vs spinoffs founded as proprietorships

Who lives longer? Startups vs spinoffs founded as proprietorships Purpose– Studies on spinoffs neglect firms founded by single individuals (i.e. proprietorships) thus overlooking a large portion of new ventures. Moreover, scholars usually do not consider the effect of the rank, and the amount, of founder’s working experience on spinoff’s survival. The purpose of this paper is to analyze a sample of 3,456 Italian manufacturing proprietorships. Design/methodology/approach– Out of an initial population of some 6,000 firms, the authors obtained a sample of 3,456 usable records with complete information about new ventures and founders’ background. The authors relied on the class of methods known as “proportional hazard models” to perform survival analyses. Findings– Analyses show that spinoffs from surviving parents outlive other startups. Surprisingly, spinoffs from high-ranked positions have comparable hazard rates than other startups while spinoffs from low-ranked positions have lower hazard rates than other startups. Finally, industry-specific working experience has a curvilinear inverted U-shape effect on spinoffs’ survival. Originality/value– The present study contributes to the debate on spinoffs’ survival and bears important ramifications into the relationship between knowledge inheritance and entrepreneurial dynamic capabilities. It is also helpful in informing public policies aimed at encouraging entrepreneurial activities in the form of new proprietorships. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Entrepreneurial Behaviour & Research Emerald Publishing

Who lives longer? Startups vs spinoffs founded as proprietorships

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1355-2554
DOI
10.1108/IJEBR-08-2015-0179
Publisher site
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Abstract

Purpose– Studies on spinoffs neglect firms founded by single individuals (i.e. proprietorships) thus overlooking a large portion of new ventures. Moreover, scholars usually do not consider the effect of the rank, and the amount, of founder’s working experience on spinoff’s survival. The purpose of this paper is to analyze a sample of 3,456 Italian manufacturing proprietorships. Design/methodology/approach– Out of an initial population of some 6,000 firms, the authors obtained a sample of 3,456 usable records with complete information about new ventures and founders’ background. The authors relied on the class of methods known as “proportional hazard models” to perform survival analyses. Findings– Analyses show that spinoffs from surviving parents outlive other startups. Surprisingly, spinoffs from high-ranked positions have comparable hazard rates than other startups while spinoffs from low-ranked positions have lower hazard rates than other startups. Finally, industry-specific working experience has a curvilinear inverted U-shape effect on spinoffs’ survival. Originality/value– The present study contributes to the debate on spinoffs’ survival and bears important ramifications into the relationship between knowledge inheritance and entrepreneurial dynamic capabilities. It is also helpful in informing public policies aimed at encouraging entrepreneurial activities in the form of new proprietorships.

Journal

International Journal of Entrepreneurial Behaviour & Research – Emerald Publishing

Published: May 3, 2016

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