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research article

Pre-Entry Knowledge, Learning, and the Survival of New Firms

Dencker, John C.
•
Gruber, Marc  
•
Shah, Sonali K.
2009
Organization Science

New firms are endowed with knowledge and experience at birth through the human capital of their founder(s). Existing empirical research suggests that this pre-entry knowledge and experience will influence the firm's chances of survival; however, the mechanisms underlying this relationship have yet to be investigated. We seek to better understand and unpack this relationship. Specifically, we study the extent to which a founder's pre-entry knowledge of the business activity and pre-entry management experience influence the effectiveness of two subsequent learning activities—namely, early-stage business planning and product-line change. Our findings suggest that pre-entry knowledge and management experience increase firm survival through moderating the effects of these subsequent learning activities. We also find that learning activities are not always beneficial; in our sample, early-stage business planning is associated with decreased firm survival, and product line change is associated with increased firm survival. We examine these patterns using survey data collected from 436 individuals in the Munich region who founded their own firms as an alternative to continued unemployment. Our results have theoretical implications for the entrepreneurship, evolutionary economics, and organizational learning literatures.

  • Details
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Type
research article
DOI
10.1287/orsc.1080.0387
Web of Science ID

WOS:000266171000003

Author(s)
Dencker, John C.
Gruber, Marc  
Shah, Sonali K.
Date Issued

2009

Published in
Organization Science
Volume

20

Issue

3

Start page

516

End page

537

Subjects

prior experience

•

knowledge

•

learning

•

adaptation

•

entrepreneurship

•

firm survival

•

human capital

•

unemployment

•

business planning

•

evolutionary economics

•

Organizational Mortality

•

Strategic Management

•

Absorptive-Capacity

•

Automobile-Industry

•

Small Businesses

•

Decision-Making

•

Probit Models

•

Performance

•

Entrepreneurial

•

Capabilities

URL

URL

http://orgsci.journal.informs.org/cgi/content/abstract/20/3/516
Editorial or Peer reviewed

REVIEWED

Written at

EPFL

EPFL units
ENTC  
Available on Infoscience
July 20, 2009
Use this identifier to reference this record
https://infoscience.epfl.ch/handle/20.500.14299/41744
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