Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Centre for Innovation Research

No 2020/9: Does the Timing of integrating new Skills affect Start-up Growth?

Markus Grillitsch () and Torben Schubert ()
Additional contact information
Markus Grillitsch: CIRCLE, Lund University, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden
Torben Schubert: CIRCLE, Lund University, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden

Abstract: Growth often requires start-ups to recruit new skills not present in the founding team. We analyze if the relationship between integrating new skills and growth depends on timing. Should new skills be recruited as early as possible, or can start-ups add them as needed along the way? Using a unique panel dataset covering Sweden’s population of start-ups from 1997-2012, our analysis shows that i) start-ups grow faster if they integrate novel skills early in their life, while adding novel skills later reduces growth, and ii) corporate spin-offs profit less from recruiting novel skills than de novo start-ups. We mirror our results against existing theories and develop theoretical perspectives for future research.

Keywords: start-ups; growth; spin-offs; time/temporal aspects; venture teams

JEL-codes: M13; M51

53 pages, October 28, 2020

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