The Rejuvenation of Inventors Through Corporate Spinouts

Organization Science (2014). DOI: 10.1287/orsc.2013.0868

38 Pages Posted: 6 Dec 2013 Last revised: 21 Sep 2021

See all articles by Bruno Cirillo

Bruno Cirillo

SKEMA Business School

Stefano Brusoni

ETH Zurich - Department of Management, Technology and Economics

Giovanni Valentini

Bocconi University - Department of Management and Technology

Date Written: December 5, 2013

Abstract

This article focuses on corporate spinouts as a strategy that can rejuvenate the inventive efforts of inventors with a long tenure in the same company. We rely on an unbalanced panel of 5,604 inventor-year observations to study a matched sample of 431 inventors employed by the Xerox Corporation and find evidence in support of three predictions. First, inventors who join a spinout increase the extent of exploration in their inventive activities. Second, they decrease the extent to which they rely on the parent organization’s knowledge. Third, because long-tenured employees, through socialization, tend to progressively adopt more exploitative behavior than short-tenured members, they benefit relatively more from the spinout experience. These results are robust to several econometric specifications that try to account for the endogeneity of the inventors’ decision to join the spinout, for the fact that spinouts’ inventive activity may be intrinsically different from that of the parent company, and for the possible presence of novel external stimuli for those who join spinouts. The data provide large-sample evidence consistent with the idea that socialization reduces opportunities for organizational learning; we discuss the implications for theory and practice.

Keywords: exploration; exploitation; socialization; corporate entrepreneurship; spinouts

Suggested Citation

Cirillo, Bruno and Brusoni, Stefano and Valentini, Giovanni, The Rejuvenation of Inventors Through Corporate Spinouts (December 5, 2013). Organization Science (2014). DOI: 10.1287/orsc.2013.0868, Available at SSRN: https://ssrn.com/abstract=2363854

Bruno Cirillo (Contact Author)

SKEMA Business School ( email )

60 rue Dostoïevski
Sophia Antipolis, 06902
France

Stefano Brusoni

ETH Zurich - Department of Management, Technology and Economics ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland

Giovanni Valentini

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

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