Entrepreneurial Spin-offs Research Articles

Corporate Defection and Outlying Control on Resource Reallocation

We study the determinants of the spawning of new entities by an organization when members control significant productive assets and have the agency to leave with these. Cooperatives, a highly prevalent organizational form worldwide in almost all industries, are particularly prone to such corporate defection. Building on the entrepreneurial spin-offs and the corporate divestiture literatures, we pay equal attention to the members’ incentive to leave with their assets as well as the organization’s interest in retaining, redeploying, or letting go these assets. Interestingly, cooperatives only have an outlying control over these assets: they can influence the retention of these assets within their scope despite not having the legal control over these. Our empirical context is a winemaking cooperative where cooperative-, individual-, and asset-level data enable us to analyze member defection, democratic governance in the organization, and resource redeployment. We find that economics drivers push members to defect while their operating as an incorporated entity accelerates this process. Nevertheless, both democratic governance and resources redeployment processes can help in retaining members within the cooperative. These findings contribute to expand our understanding on cooperatives and also provide further insights on the functioning of traditional corporations such as multi-business firms.

Lukewarm or Hot? Comparing Investor Tie Formation of Entrepreneurs in Silicon Valley and Berlin

This study contributes a contextual perspective on tie-formation practices that is relevant to both entrepreneurship- and network research. Existing research has highlighted that forming personal ties to investors requires skillful networking from entrepreneurs. We shift attention to how such activities are shaped by local values, norms, and taken-for-granted assumptions about what is considered socially legitimate networking behavior in different institutional contexts. We present results from an embedded, multiple case study, in which we compared two types of entrepreneurs (start-up entrepreneurs and academic spin-off entrepreneurs) across two different institutional contexts that both provide a dynamic environment for entrepreneurial activities (Silicon Valley and Berlin). Our study offers theoretical insights into how institutional contexts shape tie-formation practices through tie-formation scripts. We identify practices and scripts that are distinct to the two different contexts. Moreover, we offer novel insights into how tie-formation scripts shape the quality of entrepreneurs’ networks over time, as well as how they constrain (or enable) their ability to move from one institutional context to another. In particular, we introduce the novel concept of tie warmth to explain why strategies of network broadening may be appropriate in some contexts, network deepening is appropriate in others, and in some contexts, forming personal ties to investors may not be useful at all.

High‐performer mobility to entrepreneurship and parent‐firm performance

AbstractResearch SummaryWe investigate the effect of high‐performer employee mobility to same‐industry startups on parent‐firm performance. High‐performer mobility induces a loss of human assets but might also enable competition by transferring human and complementary assets from the parent firm to a competitor. Only when such transfer occurs is mobility to same‐industry startups more harmful than other types of high‐performer mobility. Human and complementary asset transfer is conditional on the departing high performer's ability to accumulate (and hence transfer) knowledge from the parent firm and the recipient firm's ability to absorb such knowledge. In support of this hypothesis, we show that the high performer's tenure and the startup's resources (size) moderate the performance effect of high‐performer mobility on same‐industry startups.Managerial SummaryIndustry experience is critical for new venture performance, and spinoff entrepreneurs (former employees from the same industry) perform better than other start‐ups. However, studies have found that high performers' mobility to spinoffs harms the performance of their former employers. This paper asks when do spinoffs result in increasing competition and when is spinoff entrepreneurship more harmful compared to other types of high performer mobility? We show that additional detrimental performance effects on former employers depend on employee tenure and the spinoffs' start‐up size. We argue that longer tenure increases competition because it allows the employee to form and strengthen personal relations, for example, to customers, and to accumulate more knowledge on products and processes. Start‐up size is important for the recreation and appropriation of this knowledge.

Digital entrepreneurs in technology-based spinoffs: an analysis of hybrid value creation in retail public–private partnerships to tackle showrooming

PurposeRetail networks present new challenges in the business-to-business (B2B) collaboration between technology-based spinoffs and traditional businesses. This study aims to explore a public–private partnership (PPP) that leverages advanced digital technologies via spinoffs to tackle the key challenge of showrooming that retail shops are facing. Showrooming is the phenomenon in which shoppers go to the physical stores to gather in-depth product information, and later on, decide to buy the product from online retail competitors.Design/methodology/approachThis research draws on a longitudinal qualitative study of a social context in which digital entrepreneurs are embedded. The empirical setting is a retail network in Italy, Germany and Finland with a particular focus on the process in which a PPP delivers innovation via spinoffs in the context of brick and mortar shops (B&M). The research design enables an understanding of the complexity of the phenomenon from a business and a social perspective.FindingsNew technology to tackle showrooming enables the creation of substantial hybrid value in retail partnerships. Spinoffs are key actors in leveraging digital technologies to create value faster and more tailored compared with large software companies. Spinoff entrepreneurs leverage on specific technologies (e.g. virtual reality and artificial intelligence) available inside organizations’ network (i.e. PPPs). Spinoffs are found to be a fundamental actor in the process of dealing with showrooming because of their time to market. Large software companies usually are not interested in approaching B&M shops because of the high operational costs of product customization for B&M shops.Practical implicationsManagers could use the success factors of the spinoffs in helping their B&M shops to improve both shopper experience and salesperson performance. For managers of B2B retail network, the results are useful towards increasing the involvement of shoppers while they are visiting physical stores, and it also improves salesperson performance. It also leads to the observation that cross-selling is one of the most effective responses to the phenomenon of showrooming. As practical implications for policymakers, the current research supports the view that PPPs should support the creation of spinoffs as a result of longitudinal innovation projects.Social implicationsRetail technologies leveraged from a PPP and commercialized by spinoffs are powerful tools to enable a better quality of salespeople’s life in the working place. At the same time, these new technologies help shop owners increase the retention rates, conversion rates and reduce short-term loss, increasing the likelihood of B&M shops to survive in the condition of extreme competition caused by the showrooming phenomenon.Originality/valueThis research proposes a model of hybrid value creation from networks in digital retail. The model indicates that PPPs create spinoffs to explore showrooming and deliver substantial hybrid value (i.e. business and social) for physical retail shops, mainly because it influences the companies’ growth, employee performance and customer satisfaction. This model expands the field of B2B marketing by identifying factors that enable spinoff creation from retail networks and proposes success factors and research propositions in retail networks.

STUDY AND ANALYSIS OF IMPACT FACTORS ON THE LEVEL OF MATURITY OF THE MOROCCAN AEROSPACE ECOSYSTEM AND THEIR EFFECTS ON THE LOCAL SUPPLY CHAIN

Our study made it possible to analyses the cumulative effect of foreign direct investments represented by the principals installed on the structure, the density of its actors and the integration of the new trades in the local aeronautical Supply chain. Indeed, we have seen the birth of an industrial platform made up of several capabilities and industrial capacities that have been able to respond to a first request for subcontracting at lower cost in the manufacture of the elementary part to complex subsets for the (OEM) Original Equipment Manufacturer tier 1 and tier 2. Through a benchmark model of the cluster performance that we had built, we are able to verify these influential parameters across a benchmark and define the level of maturity of an industrial ecosystem in a global supply chain compared to its competing countries. The goal is to deduce the success factors that would maximize the performance of an industrial cluster, in particular the technological and, the entrepreneurial spin-offs.

A Review and Prospects of Foreign Literature on Spin-off

Spin-off refers to the process of forming new ventures（spinoffs）from existing organizations（parent companies）. Spin-off, as a special way to set up new ventures, is an effective way for employees to seek self-realization and an important means for enterprises to implement strategic change, and also plays an indispensably important role for industrial clusters and regional economic development. Foreign scholars have carried out a lot of researches on spin-off, however, the amount of domestic research done on this topic is rather limited, not receiving enough attention. Through the review of related literature, this paper firstly reviews the definition, types and processes of spin-off, emphatically combs the theoretical basis, and summarizes the influencing factors of spinoff performance for a further step. Specifically speaking, foreign scholars have basically agreed on the concept and characteristics of spin-off. Previous studies have mainly classified spin-off as academic spin-off, corporate spin-off and entrepreneurial spin-off, but they often equate and mix corporate spin-off and entrepreneurial spin-off. And with regard to spin-off process researches, the process of entrepreneurial spin-off has been neglected. Secondly, we find that spin-off research is mainly based on four different perspectives, including resource-based view, knowledge-based view, agency perspective and transaction cost perspective. Thirdly, the factors affecting the performance of spinoffs mainly include the characteristics of the participants（founders or founding teams, spinoffs, parent companies）and the external environment. For different types of fission, the influencing factors are also different. Finally, this paper points out the directions in future research based on the limitations of current spin-off researches, including distinguishing different types of spin-off and focusing on entrepreneurial spin-off, developing expansionary research on the concept and types of spin-off in the Chinese context, exploring the mechanism of spin-off process deeply, analyzing the influencing mechanism of spin-off through the fusion of multiple perspectives, and studying on the multi-level integration of the influencing factors of spin-off.

The Spinoff Advantage: Human Capital Law and Entrpreneurship

The term entrepreneur comes from the French word entreprendre, which signifies “one who undertakes innovations.” That underlying innovative nature typifies entrepreneurship’s vital role in our economy, contributing to both economic growth and industry progress. Many states affirmatively support entrepreneurship through tax credits, subsidies, and awards, as well as by sponsoring incubators and accelerators. And yet, despite this public policy favoring entrepreneurship, human capital law – which lies at the intersection of intellectual property, employment regulation, and contract law – has developed in ways that often curtail that very same entrepreneurial activity. Post-employment restrictions, both contractual and regulatory, particularly limit the ability of the most experienced professionals to found, or even join, new ventures. This chapter explores the discordant, contradictory nature of state policies favoring both entrepreneurial venture and human capital law and argues against the counter-productive expansion of restrictions on talent mobility. It first discusses the general disadvantage startups face in litigation brought by incumbents as well as the rise in intellectual property disputes and their effects on entrepreneurship. The chapter then presents the particular cost of human capital legal disputes on entrepreneurial spinoffs, that is, companies founded by former employees of competitors.

Spin-Offs as Microfoundations of Dynamic Capabilities in Rapidly Growing SME

This paper analyzes how spin-offs can contribute to the micro foundations of dynamic capabilities in rapidly growing SMEs. Building on a multi-case study, three functions of spin-offs are analyzed at a supra level: boundary spanning to sense opportunities, flexible organizing to seize them and ambidextrous orchestration to reconfigure them. At an infra level, dynamic managerial foundations include a repertoire of cognitive, managerial and social skills that both the parent company owner-managers and the spin-off entrepreneurs share. However, they leverage those skills differently in terms of scope, speed and depth, thus complementing each other at different stages of the spin-off process.

Spinoffs versus non-spinoff entrepreneurs

PurposeThe purpose of this study is to explore the role of spinoff entrepreneurs in the post-bubble Japan and ultimately to facilitate policy reforms that benefit entrepreneurs most in need of support.Design/methodology/approachThis study adopts a survey of Japanese entrepreneurs from 2003 to 2013. Exploiting the survey questions, the authors separate spinoff startups from the non-spinoff startups. Using this data set, this study first performs a logistic regression, followed by a chi-squared independence test between spinoff startups and firm performance.FindingsThis study finds that while both human and social capital predict the probability of a firm’s positive performance, industry experience was the strongest predictor for the probability of performance.Originality/valueAs Garvin (1983) stated, most research on spinoffs are limited to both industry type and location. The theoretical contribution of this study is to broaden the applicability of current entrepreneurship theories by considering industries beyond technological startups. The practical value of this study is to begin evaluating policies and their interaction effect with cultural context.

Global Start-Ups and Born Global Spin-Offs: A Multiple Case Study

The paper aims to identify and analyze the major critical success factors at the base of the rapid internationalization of three different types of Born Global (BG) firms, namely start-up, academic spin-off and company spin-off. Based on a case study analysis, the findings show that the entrepreneurs’ dynamic capabilities, their passion and propensity to take risks, previous international experiences, language skills, the presence of an experienced staff, the ability to nurture relationships and networks based on mutual trust and on the transfer of know-how represent the major key factors for internationalization. This study intends to strengthen the literature focused on the BG phenomenon. However, the empirical analysis was conducted on an exiguous number of enterprises, operating in the high-tech sectors and founded few years ago. In order to obtain more generalizable results, future research should also focus on companies active in the low-tech sectors and founded in less recent years. Classification-JEL: Keywords: Born global; Global Start-up; Born Global Academic spin-off; Born Global Entrepreneurial Spin-off; non-linear internationalization process; multiple case study

Structural and longitudinal analysis of the knowledge base on spin-off research

Following the dynamism in spin-off research, in this study we conduct a structural and longitudinal bibliometric analysis of a sample of 812 articles on spin-offs published in 234 journals included in the ISI Web of Knowledge over a period of three decades. The analyses do not seek to establish a new conceptualization but rather to reveal the intellectual structure of the field and how it has evolved, and the profile of the knowledge network established in the three perspectives: corporate, academic and entrepreneurial spin-offs. The diversity involved in the three streams of spin-off research signals substantial differences. Theoretically, transaction costs, agency and the resource-based view have remained a foundation of spin-off research, albeit that research has been driven more by the phenomena than by developing the theory. The more traditional focus on corporate spin-offs was followed by emphasis on academic spin-offs and more recently on entrepreneurial spin-offs. This shift has been accompanied by a more business/management theoretical orientation, replacing a more financial and taxation-based perspective underlying corporate spin-offs. This study systematizes the existing stock of knowledge and raises avenues for additional inquiry.

Triggers of Entrepreneurial Spin-Offs: Assessing an Alternative Innovation for Enterprise Development in Ghana

Triggers of Entrepreneurial Spin-Offs: Assessing an Alternative Innovation for Enterprise Development in Ghana

Economic impact of entrepreneurial universities’ activities: An exploratory study of the United Kingdom

Throughout economic history, institutions have established the rules that shape human interaction. In this sense, political, socio-cultural, and economic issues respond to particular forces: managed economy or entrepreneurial economy. In the entrepreneurial economy, the dominant production factor is knowledge capital that is the source of competitive advantage, which is complemented by entrepreneurship capital, representing the capacity to engage in and generate entrepreneurial activity. Thus, an entrepreneurial economy generates scenarios in which its members can explore and exploit economic opportunities and knowledge to promote new entrepreneurial phenomena that have not been previously visualised. In this context, the entrepreneurial university serves as a conduit of spillovers contributing to economic and social development through its multiple missions of teaching, research, and entrepreneurial activities. In particular, the outcomes of its missions are associated with the determinants of production functions (e.g. human capital, knowledge capital, social capital, and entrepreneurship capital). All these themes are still considerate potentially in the research agenda in academic entrepreneurship literature. This paper modestly tries to contribute to a better understanding of the economic impact of entrepreneurial universities’ teaching, research, and entrepreneurial activities. Taking an endogenous growth perspective, the proposed conceptual model is tested using data collected from 2005 to 2007 for 147 universities located in 74 Nomenclature of Territorial Units for Statistics-3 (NUTS-3) regions of the United Kingdom. The results of this exploratory analysis show the positive and significant economic impact of teaching, research, and entrepreneurial activities. Interestingly, the higher economic impact of the United Kingdom's entrepreneurial universities (the Russell Group) is explained by entrepreneurial spin-offs. However, our control group composed by the rest of the country's universities, the highest economic impact is associated with knowledge transfer (knowledge capital).

Regional Branching Reconsidered: Emergence of the Fuel Cell Industry in European Regions

abstract The literature on economic geography suffers from a lack of attention to the emergence of new industries. Recent literature on “regional branching” proposes that new industries emerge in regions where preexisting economic activities are technologically related to the emerging industry. This article provides a more grounded basis for the emerging literature on regional branching by confronting the regional branching thesis with the realities of an emerging industry, namely, the fuel cell industry. The analysis is based on patent data and qualitative interviews conducted in a selection of European NUTS2 (nomenclature of territorial units for statistics) regions. The findings can be summarized as follows. First, the analysis reveals that in the case of the emerging fuel cell industry, regional diversification is dominated by firm diversification, which complements previous studies’ findings that entrepreneurial spin-offs dominate regional diversification. Second, the study corroborates the assumption that the process of regional branching relies on knowledge generated by nonindustrial actors such as universities and research institutes. Third, the findings suggest that care should be taken in ascribing the underlying logic of regional branching to the principle of technological relatedness alone. The article shows how some regional diversification processes occur in regions where preexisting economic activities are not technologically related to the emerging industry, for instance, when user industries apply new technologies to their product portfolio. The importance of further investigating and disentangling different dimensions of relatedness and their impact on regional branching is stressed.

Path-Dependent Startup Hubs - Comparing Metropolitan Performance: High-Tech and ICT Startup Density

Kansas City and other areas viewed as startup hubs actually have been fostering a culture of entrepreneurship for some time. Many of these cities have a history of strong technology sectors or experienced strong growth among technology startups over the past two decades. A strong regional or local culture of technology entrepreneurship is not a recent phenomenon, contrary to the opinions of many. The top 10 cities in 2010 also ranked among the top 20 cities two decades earlier.This analysis shows that many cities' recent adoption of new entrepreneurship programs is more an indication of the underlying strength of the region and its base of talent on which those programs can build than it is a cause of startup activity. Cities such as Kansas City, Seattle, Portland and Boise all owe their emerging entrepreneurial ecosystems to many years of spinoffs and entrepreneurial spawning.Research universities and other postsecondary institutions are important for metropolitan entrepreneurship, but are not the sole cause in spurring such activity. Instead, the most fertile source of entrepreneurial spawning is the population of existing companies, which has implications for economic policymaking and economic development strategies.Entrepreneurs come from somewhere - this seems obvious, but that observation runs against the prevailing stereotype that entrepreneurs are, or should be, recent college grads or college dropouts. That 'somewhere' usually is a previous job in a big company or at an institution, such as a university, which helps explain the age distribution of entrepreneurs.However, regions should be careful in turning these observations into policy. While spinoffs are important for tech startup growth, such a strategy could be wrongly interpreted as supporting traditional economic development strategies of tax incentives for big companies. More work must be done to understand the local and regional dynamics of entrepreneurship, barriers that may exist to catalyzing a self-fulfilling dynamic of entrepreneurial spinoffs and what the proper role of supporting institutions should be.

“Cluster” Creation by Reconfiguring Communities of Practice

By asking how agglomerations of certain industries emerge, the paper investigates processes of local specialization inspired by evolutionary theory. Deductive reasoning found in the competitiveness literature is de-emphasized. The paper rather introduces an alternative approach to agglomeration formation, based on microsociology: “The reconfiguring of communities of practice”. Six Norwegian municipalities, having three times as high rate of employment in mechanical engineering industry as the nation, are subjects for comparative studies. The paper identifies and explains five different types of startup initiatives where new firms within this industry sector are added to the local firm population. They are all interpreted as reconfigurations of local communities of practice and as such considered as endogenous processes: parent firms as incubators for entrepreneurial spin-offs and serial entrepreneurs create growth in specialized agglomerations. Some local environments have particular capacities to generate an increasing number of firms. Prevailing family businesses limit growth at the firm level. “Big company” traditions hamper entrepreneurship. Deliberate demergers in order to cope with market crises compensate for the downsizing of dominant companies. It is surprising that the study has not identified examples of localizations from outside into the agglomerations. The theoretical approach and the empirical findings from the study have certain policy implications regarding facilitating endogenous development.

Intrapreneurs, entrepreneurs and spin-off entrepreneurs: similarities and differences

The topic concerning intrapreneurs pursuing new ventures within established firms is underresearched, despite the booming literature on corporate venturing. We know little about whether intrapreneurs are especially competent, proactive, innovative, growth-oriented and risk takers – and how well they perform. These issues are addressed by comparing intrapreneurs with commoners and with entrepreneurs starting new firms, and also by comparing spin-off entrepreneurs starting a new firm based on an existing firm with independent entrepreneurs. Our comparisons use two data sets: our Global Entrepreneurship Monitor (GEM) survey of adults in Denmark with follow-up interviews of intrapreneurs, entrepreneurs and commoners, and our survey of newly established entrepreneurs in a typical county in Denmark. Comparisons reveal that intrapreneurs are more competent and growth-oriented than entrepreneurs. Likewise, spin-off entrepreneurs are more competent and growth-oriented than independent entrepreneurs, and spin-off firms quickly reach higher performance. These similarities and differences among intrapreneurs, spin-off entrepreneurs and independent entrepreneurs offer directions for a deeper understanding of both internal and external venturing.

Entrepreneurial Impact: The Role of MIT

Research- and technology-intensive universities, especially via their entrepreneurial spinoffs, have a dramatic impact on the economies of the United States and its fifty states. A new report on just one such university, the Massachusetts Institute of Technology, indicates conservatively that, if the active companies founded by MIT graduates formed an independent nation, their revenues would make that nation at least the seventeenth-largest economy in the world. A less conservative direct extrapolation of the underlying survey data boosts the numbers to 25,800 currently active companies founded by MIT alumni that employ about 3.3 million people and generate annual world sales of $2 trillion, producing the equivalent of the eleventh-largest economy in the world.These findings result from an analysis of MIT alumni-founded companies and the entrepreneurial environment that fosters this new-company creation. Conducted by Edward B. Roberts and Charles Eesley of the MIT Sloan School of Management, the report is based on a 2003 survey of all living MIT alumni, with additional detailed analyses, including verification and updating of revenue and employment figures to 2006 from records of Compustat (public companies) and Dun & Bradstreet (private companies).

Speciation through entrepreneurial spin-off: the Acorn-ARM story

Speciation through entrepreneurial spin-off: the Acorn-ARM story

Speciation through entrepreneurial spin-off: The Acorn-ARM story

Can the concept of speciation explain evidence on how technologies branch and advance? Can evidence on innovation through spin-off usefully inform the concept of speciation? These questions are addressed through a case study of detailed processes enabling the shift of technology to new domains of application. An innovative IT firm developed its own semiconductor technology to remedy supplier deficiencies but it required a joint venture with a completely new business model to adapt and move the technology into new market domains. We propose the concept of techno-organizational speciation to delineate this phenomenon. Competing perspectives on speciation (compatibility, niche and lineage approaches) are found to illuminate the evidence, while complementarities between these conceptual dimensions are revealed by the case. Causal processes uncovered include the following: (1) Techno-organizational speciation through spin-off may be needed to launch a dominant technical standard, compatible with multiple applications. (2) This can be achieved through niche creation from which develops a new business ecosystem. (3) Inherited knowledge together with organizationally based learning foster the branching and renewal of technological lineages.