What Do I Take with Me?: The Mediating Effect of Spin-Out Team Size and Tenure on the Founder-Firm Performance Relationship

42 Pages Posted: 12 Apr 2013

See all articles by Rajshree Agarwal

Rajshree Agarwal

University of Maryland - Robert H. Smith School of Business

Benjamin A. Campbell

The Ohio State University - Fisher College of Business

April Franco

University of Toronto - Rotman School of Management; University of Toronto at Scarborough - Division of Management

Martin Ganco

University of Wisconsin - Madison - Department of Management and Human Resources

Date Written: April 1, 2013

Abstract

Our study examines the mediating effect of spin-out team characteristics on the relationship between founder quality and parent and spin-out performance. Since the ability to transfer or recreate complementary assets is a critical determinant of performance, we theorize and show that founders with greater ability impact both parent firm and spin-out performance by assembling teams that represent strong complementary human capital. Using linked employee-employer US Census data from the legal services industry, we find founding team size and tenure mediate the founder quality effect. Our findings have practical implications for both managers of existing firms and aspiring founders as it relates to their human resource strategies: the factor most salient to performance is not the individual quality per se, but the manner inwhich it impacts the transfer and spillover of complementary human capital.

Suggested Citation

Agarwal, Rajshree and Campbell, Benjamin A. and Franco, April and Ganco, Martin, What Do I Take with Me?: The Mediating Effect of Spin-Out Team Size and Tenure on the Founder-Firm Performance Relationship (April 1, 2013). US Census Bureau Center for Economic Studies Paper No. CES-WP- 13-17. Available at SSRN: https://ssrn.com/abstract=2247653 or http://dx.doi.org/10.2139/ssrn.2247653

Rajshree Agarwal (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

Benjamin A. Campbell

The Ohio State University - Fisher College of Business ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

April Franco

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

University of Toronto at Scarborough - Division of Management ( email )

1265 Military Trial
Scarborough, Ontario M1C 1A4
Canada

Martin Ganco

University of Wisconsin - Madison - Department of Management and Human Resources ( email )

Madison, WI
United States

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