The effect of the innovative environment on exit of entrepreneurial firms

    Authors

    M. B. Sarkar; R. Echambadi; R. Agarwal;B. Sen

    Comments

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    Abbreviated Journal Title

    Strateg. Manage. J.

    Keywords

    entrepreneurship; technological intensity; industry evolution; innovation; MARKET-STRUCTURE; TECHNOLOGICAL OPPORTUNITIES; PRODUCT DIFFERENTIATION; EVOLUTION; SURVIVAL; INDUSTRY; GROWTH; ENTRY; DIFFUSION; KNOWLEDGE; Business; Management

    Abstract

    To foster 'creative destruction,' entrants must survive the turbulent conditions they face in their first crucial years in the industry. We investigate how the external knowledge milieu of an entrant, conceptualized as its innovative environment, causes systematic variation in survival patterns. We test our model from 3,431 firms in 33 industries over 80 years. We depict the innovative environment along two knowledge-related dimensions, namely technology regime and technology intensity. While the aligned state of the innovative environment, where product innovation exists in tandem with abundant innovation opportunities, promotes entrant survival, we find that this beneficial effect is more pronounced for small entrants due to a possible mitigation of scale disadvantages. Copyright (c) 2006 John Wiley & Sons, Ltd.

    Journal Title

    Strategic Management Journal

    Volume

    27

    Issue/Number

    6

    Publication Date

    1-1-2006

    Document Type

    Article

    Language

    English

    First Page

    519

    Last Page

    539

    WOS Identifier

    WOS:000237868800002

    ISSN

    0143-2095

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