Abstract
This paper develops and tests a model where the performance of an entrepreneur as employee explains why she/he decides to venture outside the industry of the parent firm and what are the implications of this type of entry choice on the initial size of the founded firm. Our findings:(1) assist in building a more nuanced theoretical understanding of how individuals determine type of entry, and initial size; (2) have implications for how we interpret the relationship between employee performance and entrepreneurial entry process; and (3) suggest initial size as an important mechanism behind the performance advantage of spinouts.
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