Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 437: Inherited Advantage and Spinoff Success

Anders Broström (), Hans Lööf () and Pardis Nabavi ()
Additional contact information
Anders Broström: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology
Hans Lööf: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology
Pardis Nabavi: Swedish Entrepreneurship Forum & Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology (KTH)

Abstract: This paper investigates how incumbent firm characteristics affect the viability of its spinoffs. The survival patterns of spinoffs with roots in exporting firms and in technologically innovative firms are compared to the survival of other spinoffs. Using comprehensive Swedish employer-employee panel data sets, three possible outcomes are identified: survival,acquisition and complete exit from the market. Experience from an exporting parent is positively associated with spinoff survival. These inheritance benefits do, however, decrease with the tenure of ex-employees. This suggests that inherited advantages in this case is not primarily driven by enhanced opportunities for on-the-job learning. Above-average attractiveness to employees, and associated ability sorting and opportunity costs mechanisms, provides explanations for the superior survival of spin-offs from exporting firms that seem more congruent with data. The study also suggest that technological innovativeness, captured by parent's patenting activity, is negatively associated with spinoff survival when controlling for exports. This result support the view that knowledge inside innovative firms is "sticky" and not easily transferable to new ventures by ex-employees.

Keywords: entrepreneurship; exports; organizational heritage; innovation; spinoff; entrepreneurial spawning

JEL-codes: C25; F14; L26; M13; O33

33 pages, April 27, 2016

Full text files

cesiswp437.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Vardan Hovsepyan ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:31:36.