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Job Machine, Think Tank, or Both: What Makes Corporate Spin-Offs Different?

journal contribution
posted on 2023-05-17, 21:50 authored by Fryges, HR, Muller, B, Niefert, M
One way through which knowledge and technology transfer can take place is through the foundation of new firms by former employees of incumbent private firms. In this paper, we examine whether knowledge transferred from the incumbent causally affect employment growth and post-entry innovation activities of the new firm. We focus on start-ups for which a new idea (a new product, technology, production process, or management concept), which the founder developed during her work as an employee, was essential for setting up the new business. These firms are denoted corporate spin-offs. Using data from German start-ups founded in the period from 2005 to 2008, we apply nearest-neighbour propensity score matching. We find that corporate spin-offs outperform other start-ups founded by former employees of incumbent private firms that are not based on an essential idea in terms of post-entry innovation activities. However, we cannot show that corporate spin-offs benefit from the transferred idea in terms of employment growth. We conclude that a transferred idea is primarily an input factor and a stimulus for subsequent post-entry innovation activities of corporate spin-offs.

History

Publication title

Small Business Economics

Volume

43

Pagination

369-391

ISSN

0921-898X

Department/School

TSBE

Publisher

Springer

Place of publication

Van Godewijckstraat 30, Dordrecht, Netherlands, 3311 Gz

Rights statement

Copyright 2014 Springer Science+Business Media

Repository Status

  • Restricted

Socio-economic Objectives

Technological and organisational innovation

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