Abstract

http://ssrn.com/abstract=2089495
 
 

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The Who, Why and How of Spinoffs


Michael S. Dahl


Aalborg University - Department of Business and Management

Olav Sorenson


Yale School of Management

January 14, 2013

Forthcoming in Industrial and Corporate Change

Abstract:     
Studies have consistently found that entrepreneurs who enter industries in which they have prior experience as employees perform better than others. We nevertheless know relatively little about what accounts for these differences. The presumed explanation has generally been that these entrepreneurs benefit from the knowledge that they gained in their former jobs. But they might also differ from other entrepreneurs on a variety of other dimensions: Preferential access to resources or differing motivations, for example, may account for their decisions to enter known industries instead of new ones. Combining novel data from a representative survey of entrepreneurs in Denmark with a matched employer-employee database of all residents in Denmark, we examined how entrepreneurs with prior industry experience differed from those without and the extent to which these differences could account for the performance premium associated with prior industry experience. We found that those with industry experience came from younger, smaller and more profitable firms, and that they recruited more experienced employees, worked harder and placed less value on having flexible hours. The recruitment of more experienced employees and the greater effort exerted appeared to account for at least some of the performance advantage associated with prior industry experience.

Number of Pages in PDF File: 37

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Date posted: June 22, 2012 ; Last revised: April 26, 2013

Suggested Citation

Dahl, Michael S. and Sorenson, Olav, The Who, Why and How of Spinoffs (January 14, 2013). Forthcoming in Industrial and Corporate Change. Available at SSRN: http://ssrn.com/abstract=2089495 or http://dx.doi.org/10.2139/ssrn.2089495

Contact Information

Michael Slavensky Dahl (Contact Author)
Aalborg University - Department of Business and Management ( email )
Fibigerstraede 11
Aalborg Ø, 9220
Denmark
HOME PAGE: http://msdahl.com
Olav Sorenson
Yale School of Management ( email )
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

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