Search results

Why do some ventures grow to become dominant market players while most new ventures that do not fail limp along more modest trajectories? In comparison with our knowledge regarding determinants of venture creation or survival, the phenomenon of venture growth has been relatively neglected, both theoretically and empirically. Venture growth is a multi-level phenomenon co-occurring at different analytical and temporal levels. In this chapter we develop a theoretical model that accounts for venture growth as a process, drawing upon the mechanism-based theorizing approach. We offer nine social mechanisms that lead to venture growth, providing a foundation for empirical exploration and further theory building.

New ventures contribute to the competitiveness of the United States in global markets, creating jobs and wealth. Understandably, public policy makers and researchers alike have shown an interest in understanding the factors that spur these ventures’ growth, which is also an important research issue in the field of entrepreneurship. Researchers have highlighted the role of owners’ needs and aspirations and industry conditions as determinants of new ventures’ growth. This study proposes that new ventures’ resource endowments influence their growth in domestic and international markets. Using the resource-based view (RBV) of the firm, the study examines the effect of select technological resources on the domestic and international sales growth of 419 new ventures. Start-ups (5 years or younger) benefit from using a different set of technological resources in achieving growth than those of adolescent firms (6–8 years old). These differences persist in low vs. high technology industries, reflecting the maturation of these ventures.

International new ventures have been argued to seek foreign markets from inception in response to the external environment and/or motivations internal to the firm. For example, a new venture that exists in an industry that is more globally integrated is more likely to have a need to internationalize in order to remain competitive (Shrader, Oviatt, & McDougall, 2000). Similarly, those new ventures that have limited domestic growth due to the size of their home country may look elsewhere in order to gain a sufficient level of sales to survive (Zahra & George, 2002). Some of the many firm-specific motivations to internationalize might include the desire to fully exploit a unique product (Burgel & Murray, 2000; Oviatt & McDougall, 1994, 1995), capitalize on the learning advantage of newness (Autio, Sapienza, & Almeida, 2000) or take advantage of networking opportunities (Reuber & Fischer, 1997).

Previous studies primarily focus on how to achieve better performance in the international markets, but few centers on whether internationalization is a promising strategy for new ventures’ growth and development. Based on two pioneering frameworks Conservative, Predictable, and Pacemaker (CPP) model and the 7-P model, this paper fills this gap by analyzing how exporting exert heterogeneous effects on two types of growth, sales growth and employment growth. Accordingly, this paper aims to favor market-oriented new ventures to make a strategy on expanding international markets.

This study is based on firm-level data from the Chinese Industrial Enterprises Database. The year 2005 was used as the shock year. By conducting the propensity score matching method, 793 couples of matched new ventures were collected with sales growth and 686 couples with employment growth. The difference-in-differences method was applied to analyze the various influences that exporting has on new ventures’ sales growth and employment growth.

The main finding of this paper is that new ventures that exported can achieve better sales growth than their counterparts that only operated domestically, whereas new ventures that remain in the domestic market have no difference in employment growth from those that exported.

This study shows that exporting is especially beneficial for market-seeking new ventures. Because the study is based on Chinese data, scholars of international business can conduct further research on other countries with different economic structures.

Theoretically, this paper contributes to both international business theory and entrepreneurship theory by combining the CPP model and the 7-P model. Practically, this paper shows that exports mainly benefit the sales growth of new ventures. This suggests that business practitioners should consider their growth goals before they choose to enter the global market.

Research on new internet venture growth is lacking. The purpose of this paper is to address the gap by developing and testing a theoretical model that links venturing principles (effectuation or causation) to new internet venture growth through resource bundling (pioneering or stabilizing).

The proposed theoretical model is developed upon the entrepreneurship literature and resource-based view. Empirical data are collected from entrepreneurs and top executives in China via a survey. The Baron and Kenny (1986) mediation model assessment procedure is used to analyze the data.

Both effectuation and causation are positively associated with new internet venture growth. Effectuation leads to pioneering resource bundling, which in turn contributes to new internet venture growth. Causation also contributes to new internet venture growth, but through stabilizing resource bundling.

This research helps link the theory of effectuation to resource-based theory by revealing resource bundling as the mediator between effectuation, causation, and new venture growth. Moreover, the authors provide empirical evidence of the importance of resource bundling with entrepreneurial strategic decision logics to the growth of new internet ventures in transitional economies.

Entrepreneurs and managers of new internet ventures should leverage both venturing principles to support growth. Internet ventures generally are creative and innovative in nature, hence favor effectuation. But it will be unwise to ignore causation, which also leads to growth.

This is an original empirical research guided by theories. It is a novel insight to identify the mediating effect of resource bundling. This study likely will inspire more scholarly research on the subject. It also lays a solid foundation for further inquiry such as complementarities between effectuation and causation.

The purpose of this study is to examine the mediating effect of an owner’s growth goal on the relationship between the gender of new venture owners and the growth outcomes of their ventures.

This is a quantitative study using a large, national database and structural equation modeling.

The findings indicate that the negative relationship between gender and growth outcomes is fully mediated by the growth goals of new venture owners, their available internal resources and the amount of time and money they are able (prepared) to invest in their new venture.

The research implications include the need to better understand the impact of goal setting on new venture performance outcomes.

The government policies (for example, to stimulate firm growth) need to be designed by having a proper understanding of the various motives/goals that entrepreneurs might have when launching a new venture. Similarly, anyone providing advice to individuals involved in establishing a new venture should, before providing that advice, ensure that they have a clear understanding of the individual’s goals.

Social implications include a need to better understand the negative impact that lower available human and financial capital can have on the goals set by female new venture owners and the outcomes achieved by those ventures.

This research makes an original contribution to the literature by demonstrating: the impact of gender on human, social and financial capital; the influence of these resources on new venture goals; and, in turn, the influence of goals on new venture performance outcomes.

This article seeks to theorize and empirically examine the conditional mechanisms through which entrepreneurial legitimacy determines the success or failure of new ventures by building upon Zimmerman and Zeitz's (2002) causal process model of legitimacy.

We gathered cross-sectional data from 266 Japanese new venture owners running their businesses across a variety of sectors and empirically examined whether, how and when legitimacy positively affects new ventures' performance by employing the SPSS PROCESS macro for moderated mediation analysis.

The results indicate that rich access to a pool of valuable resources fully mediates the positive effects of legitimacy on new venture growth. Furthermore, this study offers robust empirical evidence that prior entrepreneurial experience and competitive intensity as the internal and external contingency factors significantly moderate the indirect effect of legitimacy on new venture growth through resource accessibility.

Although our analysis provides clear support for the view that important resources for new venture performance are gained through legitimacy, it does not offer precise clarifications for the type and sources of legitimacy and for the strategies that could be deployed to achieve legitimacy. Future studies should clearly distinguish tangible assets (e.g. financial resources) from intangible assets (e.g. tacit knowledge, networks and reputation) in terms of resource accessibility. Therefore, it should be worth scrutinizing the multiple dimensions of resources as potential mediators of the legitimacy-new venture growth relationship in greater depth.

From a policy perspective, this study suggests that a special emphasis needs to be placed on designing and carrying out policies aimed at increasing the visibility and credibility of entrepreneurship as a positive career path since public acceptance of entrepreneurship is essential to new venture growth. Furthermore, it is logical to conclude that achieving greater legitimacy is a pivotal strategic tool not only to overcome resource barriers but also to maximize a probability of survival, specifically for those entrepreneurs without prior experience and those operating in a fiercely competitive market environment.

Unlike previous studies that have mostly presented the direct effect of entrepreneurial legitimacy on venture outcomes (Capelleras et al., 2019; Kibler and Kautonen, 2016; Pindado and Sánchez, 2017), our research empirically identified the potential complexities inherent in this relationship by performing a conditional indirect effect analysis.

First, using the task-relationship dichotomy as a framework, the purpose of this paper is to examine the direct effects of team personality level and team personality diversity on new venture growth. Second, the study examines the interaction effects of team personality level and diversity on venture growth.

The sample consisted of 154 teams in a technology incubator in China. Data were collected through an online survey.

Results indicate that high level but low diversity of team task-oriented personality was beneficial for new venture founding teams. Diversity of team task-oriented personality would hurt the new venture growth more when the level of task-oriented personality was low. Relationship-oriented personality diversity, but not the level of relationship-oriented personality, influenced new venture growth.

These findings advance research in entrepreneurship, groups, and teams, and provide practical policy implications as well.

This study provides practical implications for policy makers regarding what supports should be provided in incubators and for entrepreneurs regarding team member selection.

This is one of the first papers to study the personality composition of new venture founding teams.

The purpose of this paper is to explore both the strategy types and strategic growth trajectories of new ventures and examine the relationship between these trajectories and new venture performance.

The paper uses evidence from six case studies of Greek high technology new ventures over a lengthy time frame. The longitudinal research design of the study allowed for the complexities of the growth phenomenon to be captured in an effective and efficient manner.

Based on an integrative three‐dimensional framework of new venture strategies, four strategy types are identified. At a static level, evidence suggests that the more strategic dimensions are emphasised in a venture strategy, the more balanced the venture's strategic position and thus, the higher its performance. With respect to the venture's dynamic trajectories, among all possible alternatives, it was found that two are the most successful. The first secures growth through focusing first on a specific innovative product/service in the domestic market and then expanding in the global market. The second secures growth through focusing first on a specific innovative product/service in the global market and then expanding the venture product scope.

The findings imply that the product and geographic dimensions of new venture strategies are the main performance differentiators, while the innovativeness dimension is a sine qua non of new ventures growth and performance. Implications for theory, business practice and policy making are discussed.

The paper contributes to knowledge in the area of new venture growth by developing a strategic typology in a catching‐up economy, where little research can be found.

The purpose of this paper is to investigate how family ties in new venture teams (NVTs) influence the intended future growth of a nascent entrepreneur’s business. The authors posit that R&D-oriented entrepreneurs in NVTs with family ties have higher growth intentions relative to those who are less oriented toward R&D.

The hypotheses were tested using data from the Panel Study of Entrepreneurial Dynamics II (PSED II). One distinctive feature of the PSED is that it is based on a random sample of 1,214 nascent entrepreneurs in the process of starting new ventures in the USA, which overcomes the recall biases associated with surveying entrepreneurs already in business and potential survivorship biases.

The results show that growth intentions in NVTs with family ties is greater when the nascent entrepreneur shows an R&D behavior, even though the presence of family members in the team is negatively related to the intentions of nascent entrepreneurs with regard to new venture growth. This effect is attributed to entrepreneurs’ long-term vision and a more favorable attitude toward change.

Data on startup teams in the PSED II come from one team member (the respondent). Therefore, differences in perceptions regarding growth intentions cannot be determined. Moreover, the sample consisted exclusively of nascent entrepreneurs in the USA.

Knowledge about the determinants of growth intentions during the venture creation phase becomes relevant if we want to influence and support the growth of newly founded firms. Nascent entrepreneurs need to understand the trade-off between emotional and financial concerns.

Nascent entrepreneurs more oriented toward R&D become more risk tolerant, and may accept certain losses to their emotional endowment in favor of pure financial goals, being more able to access the additional external resources (tangible and intangible) needed for growth.

The research expands previous evidence on the family involvement-performance debate in large firms by focusing on new ventures with family ties, with distinctive characteristics that may affect growth intentions. The authors also shed new light on the interplay between family business and entrepreneurship. In particular, the research helps gain an understanding of how NVTs with family ties deal with the opposition between the benefits from venture growth and the tendency to preserve team member’s emotional attachment.