Imprinting Effect of Initial Networks on Subsequent Network Status: A Replication and Extension Study

Abstract

This article replicates and extends Milanov and Shepherd’s ground- breaking study (Strategic Management Journal, 2013, 34, 727-750) of a positive imprinting relationship between a newcomer’s first partners’ reputation and its future network status over and beyond the current affiliations. Their analysis also showed this effect to be stronger for the newcomers whose initial partners formed a more cohesive network. This is while the predominant view to network emergence in the prior literature focuses on path-dependent mechanisms with immediately preceding network structures contributing to current network positions. The present study utilizes longitudinal data of 257 new mining firms (consisting of 118 de novo and 139 spinoff firms) to test such long-term imprinting effects in a different industry and with a novel focus on the parent-spinoff context. Using Milanov and Shepherd’s model specifications, our results partially parallel theirs: we find a positive effect of the new firm’s first partners’ reputation in both our samples but no significant moderating effect of past cohesion. Moreover, extending Milanov and Shepherd’s study, we find a positive effect of new spinoff firm’s parent’s reputation on its future status. This supports and extends the prior claims about the importance of founding conditions on new firm’s subsequent organizational outcomes beyond the intermediate network conditions.