Is Success Hereditary? Evidence on the Performance of Spawned Ventures

Posted: 24 Jun 2011 Last revised: 16 May 2013

Johannes Dick

Centre for European Economic Research (ZEW)

Katrin Hussinger

Universite du Luxembourg; Catholic University of Leuven (KUL); Centre for European Economic Research (ZEW)

Boris F. Blumberg

Maastricht University - Business Investment Research Center (BIRC)

John Hagedoorn

Maastricht University, School of Business and Economics

Date Written: May 1, 2013

Abstract

A common phenomenon in entrepreneurship is that employees turn away from employment to found their own businesses. Prior literature discusses the former employers’ characteristics that influence the creation of entrepreneurial ventures. An investigation of whether these characteristics also affect the success of the spawned ventures is missing so far. This paper contributes to the literature by showing that entrepreneurial ventures spawned by well performing firms are financially more successful than ventures stemming from bad performing firms. This suggests that spawned entrepreneurs are able to exploit valuable knowledge from their previous employers which impacts their ventures’ performance positively. The analysis is based on a linked employee-employer dataset for the Netherlands for the period 1999-2004.

Keywords: entrepreneurship, entrepreneurial spawning, start-ups, firm performance

JEL Classification: L26, M13, L25

Suggested Citation

Dick, Johannes and Hussinger, Katrin and Blumberg, Boris F. and Hagedoorn, John, Is Success Hereditary? Evidence on the Performance of Spawned Ventures (May 1, 2013). Small Business Economics 40, 911-931. Available at SSRN: https://ssrn.com/abstract=1871778

Johannes Dick

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Katrin Hussinger (Contact Author)

Universite du Luxembourg ( email )

L-1511 Luxembourg
Luxembourg

Catholic University of Leuven (KUL) ( email )

Steunpunt O&O Statistieken
Dekenstraat 2
B-3000 Leuven
Belgium

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Boris F. Blumberg

Maastricht University - Business Investment Research Center (BIRC) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

John Hagedoorn

Maastricht University, School of Business and Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

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