Career Experiences and Firm Foundings

Abstract

Because of methodological and theoretical obstacles, sociological research on organizational foundings has largely focused on societal and population level factors to explain firm foundings. This paper takes the view that understanding firm foundings also requires linking to micro-level processes. We suggest that careers are a useful way to link individual-level processes to firm foundings. The career experiences of potential founders impacts organizational foundings by influencing expectations of the liability of newness. We test our explanation on the population of inventions patented by the Massachusetts Institute of Technology over the 1980-1996 period and examine the effect of inventors' prior experiences on the probability that an invention will be commercialized through the founding of a new organization.

JEL Classification: J6, O0