In this paper we tackle the question of developing dynamic capabilities in knowledge intensive industries by entrepreneurs without initial industry-specific knowledge. We examine six in-depth cases of parent-driven drug development in bio-tech industry, and study how the yesterday’s parents become entrepreneurs and develop market entry capabilities of their firms. Previous research has highlighted the role of knowledge and experience for developing dynamic capabilities, making these cases especially interesting. By bridging the dynamic capabilities and social systems literatures, we aim to extend our knowledge about micro-foundations of entrepreneurial (market-entry) dynamic capability, and contribute to the entrepreneurship literature by better understanding the nature of new venture development in knowledge-intensive industries.
This study analyses institutional, job-related, and individual antecedents of entrepreneurial activi-ties from a longitudinal perspective. We take a holistic look at the start-up process incorporating entrepreneurial gestation activities (nascent entrepreneurship) and finally business creation (entre-preneurship) by combining two waves of a survey with a time interval of three years. Focusing on researchers reporting an entrepreneurial intention in wave one we found for example that pull factors as motivation to start a business reduce the probability to give up the business idea. Furthermore having generated an invention prevents researchers with a business idea from becoming a so-called quitter and pushes them towards starting their own business.
Prior studies have emphasized the benefits of parental support for spin-off companies, yet little is known about the phenomenon of parental hostility. This study contributes to the literature by highlighting the importance of spin-offs’ initial product strategy as a driver of parental hostility and consequent spin-off performance. In particular, integrating insights on competition and retaliation and on dynamic capabilities, it develops a moderated mediation framework linking product relatedness, parental hostility and spin-off performance. Applying a Two-Step IV approach for a longitudinal dataset of 982 corporate spin-offs in Germany, it shows that spin-offs producing products related to their parents’ offering are more likely to face parental hostility, which in turn positively affects their economic and innovation performance. Whereas hostility is expected to restrict the spin-off’s access to resources (both inside and outside the parent firm), these results suggest that even more importantly, hostility also frees the spin-off from its parent’s routines and structures, and allows it to act autonomously and flexibly. Furthermore, this positive mediation effect is not moderated by product relatedness, and partially compensates for the direct negative effect of product relatedness on spin-offs’ innovation performance. These results have important implications for spin-off companies as well as for their parents.
