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

“For example, research examines how the experience of the founding team affects the performance of new entrepreneurial firms (Beckman & Burton, 2008; Dencker, Gruber & Shah, 2009).”

“We use survival analysis to examine firm survival (e.g. Dencker et al., 2009; Geroski et al., 2010) and employ a Cox proportional hazard model.”

“…et al., 2011 Baum & Silverman, 2004 Cetindamar et al., 2012 Dimov & Shepherd, 2005 Organization Science Robson et al., 2013 Powers & McDougall, 2005 Dencker et al., 2009 Cassar, 2006 Petkova et al., 2013 Entrepreneurship Theory Aidis & Praag, 2007 & Practice Beckman et al., 2007 Strategic…”

“planning-based approaches appear to have limited success in contexts characterized by true uncertainty, as plans based on past predictions often do no longer accurately reflect the unfolding course of events in such contexts (Alvarez and Parker, 2009; Brinckmann et al., 2010; Chwolka and Raith, 2012; Dencker et al., 2…”

“In this paper, we try to fill this research gap by investigating the effects of the Junior Achievement Company Program (JACP), a program available to students in Swedish high-schools.”

“Some studies reported no effects (e.g. Dencker et al., 2009; Oe and Mitsuhashi, 2012; Ucbasaran et al., 2006; Westhead and Wright, 1998), while others showed non-linear effects (e.g. Delmar and Shane, 2006; Eesley and Roberts, 2012; Reuber and Fischer, 1994), while still others found even negative…”

“In the same vein, we control for the degree of innovation of the venture, with options ranging from not innovative or marginally innovative to radical or extremely innovative (Dencker et al., 2008; Kirzner, 1997).”

“…participant observation, or mobile tracking (e.g., Aguinis & Edwards, 2014; Clarysse & Moray, 2004; Uy et al., 2010) and retrospective techniques such as surveys or interviews (e.g., Bock, Opsahl, George, & Gann, 2012; Dencker et al., 2009a; 2009b; Murphy, Trailer, & Hill, 1996) can be used.”

“A new firm is founded with intent and it is endowed with knowledge and prior experience brought to the venture by its founders or in the event of a spin-off, resources from the parent (Dencker et al., 2009; Freeman, 1986; Helfat & Lieberman, 2002; Helfat & Peteraf, 2003; Holbrook et al., 2000).”

“As a result, a number of studies have found that founders’ pre-entry knowledge and experience enhance firms’ long-run performance and survival (e.g. Gimeno et al. 1997; Aspelund et al. 2005; Delmar and Shane 2006; Dencker et al. 2009; Geroski et al. 2010).”

“This effect size decreased for planning in the fixed effect model to 0.122 (p < 0.001) because the study of Dencker et al. (2009), which had the largest sample size in this sub-group analysis and a negative correlation, was weighted relatively higher in the fixed effect model.”

“Although we do not test the relationship between change and performance, prior research suggests that for ventures, change can be critical to opportunity capture and survival (Dencker, Gruber, and Shah, 2009).”

“This is because entrepreneurs, like any individual, draw on past experiences to organize and configure their knowledge in subsequent new business creation (Gruber, 2010; Bryant, 2014; Dencker et al., 2009).”

“Second, we build on prior research that indicates that prior knowledge and experience of an individual determine the perception and effectiveness of business planning (Burke et al., 2010; Dencker, Gruber, and Shah, 2009).”

“…et al. 2016, Eesley and Roberts 2012), the premoney valuation in the latest round (Chatterji 2009), or events occurring in the latest year, such as initial public offering (IPO) or acquisition (Beckman and Burton 2008), or survival (Dencker et al. 2009, Hiatt and Sine 2014, Adams et al. 2015).”

“New entrants are endowed with the pre-entry knowledge of their founders (Agarwal et al. 2004, Dencker et al. 2009, Helfat and Lieberman 2002, Huber 1991).”

“firms with government assistance, Dencker et al. (2009) found that pre-entry knowledge from prior work experiences lowered the hazard rate of failure for new ventures, whereas general work experience had no effect.”

“…facilitate the accumulation and integration of new knowledge, allow a firm to comprehend and apply new information in ways that firms lacking that knowledge cannot, and shape a firm’s ability to successfully adapt to new situations (Weick 1996; Huber 1991; Nelson and Winter 1982; Dencker et al. 2009).”

“…al. 2010), academic human capital (Toole and Czarnitzki 2009), and experiences (Shane and Khurana 2003, Agarwal et al. 2004, Bayus and Agarwal 2007, Dencker et al. 2009); individual differences such as conscientiousness, openness to new experiences, emotional stability and extroversion (Zhao et…”

“This research also supports the suggestion that a firm’s initial resources and capabilities affect its ability to enact and adapt to changes in an industry environment subsequent to entry (Dencker et al. 2009).”

“However, a new firm possesses an endowment in the form of the knowledge and prior experience of its founders that is brought to the new enterprise (Holbrook et al. 2000, Dencker et al. 2009).”

“Finally, following Dencker et al. (2009), we control for the founder's prior leadership experience, which can affect the entrepreneurship process.”

“That’s somewhat surprising given the fact that numerous accounts have highlighted prior managerial experience as one of the factors favoring spinoff entrepreneurs (e.g., Phillips 2002; Dencker et al. 2009).”

“This expectation is in line with the findings in the learning literature that past experiences can generate learning that enhances growth, competitiveness, and survival (e.g., Huber 1991, Baum and Ingram 1998, Dencker et al. 2009).”

“Prior research evidence suggests that those with higher capital resources are more likely to establish successful new ventures (Dencker, Gruber, and Shah 2009a ), since such capital endowments allow exploitation of the potential inherent in processes of production (Chandler 1990 ; Penrose 1959 ).”

“This reflects research emphasizing the importance of organizational learning as a key requirement for superior performance (Dencker et al., 2009; Wyer et al., 2010).”

“Similarly, evidence has shown that entrepreneurial ventures with greater functional breadth in their TMTs bring in fewer new employees (Dencker et al., 2009a).”

“As a result, immediate prior affiliations influence new firm funding, growth, and survival (Phillips 2002, Agarwal et al. 2004, Chatterji 2009, Dencker et al. 2009, Sørensen and Phillips 2011).”

“…the new venture (Stinchcombe, 1965; Boeker, 1988) and that new firms are shaped by the experience entrepreneurs gain through prior employment (e.g., Dencker, Gruber, and Shah, 2009), there is still much we do Keywords: agglomeration; spinoffs; spawns; performance; hedge funds *Correspondence to:…”

“More generally, the literature has stressed that learning is an essential element of a new firm’s success (Dencker et al. 2009).”

“Drawing on the recent literature, for instance, Divenney et al. (2019) hold that during internationalization, many SMEs fail in the global market because of a lack of networking abilities in host country markets and the talent to learn from the success or failure of firms in the network. Madsen and Desai (2010) advoca…”

“Business experience: self Previous business experience of Owner: 0 = No; 1 = Yes Dencker et al. (2009) ? with survival when combined with other variables”

“, 2005), exhibit higher firm survival (Dencker et al., 2009), and are stressed less (Kollmann et al.”

“Dencker et al. (2009) conclude that planning does not lead to any benefit in entrepreneurial situations.”

“Our study complements ideas that consider congenital knowledge as being mainly inherited from the founders or key employees of a new firm (Agarwal et al. 2004, Dencker et al. 2009).”

“Evaluating progress against key targets is particularly important when faced with crucial decisions such as the deployment of capital equipment (Grinyer et al., 1986) or the opportune time for employing staff (Dencker et al., 2009b).”

“…complements and builds upon prior research on the role of founders' pre-entry knowledge and experience in startup performance (Cao & Posen, 2023; Dencker et al., 2009) by showing that the benefits of accelerator participation — and the impact of knowledge-building programming within…”

“The education of the founder (Parker, 2018) and also the amount of previous (personal or parental) business experience (Gimeno et al.,1997; Dencker et al., 2009) are seen by some to capture different dimensions of human capital, and perhaps higher levels of entrepreneurial skills and capabilities,…”

“Organizational routines are a specific type of tacit knowledge (Boschma & Frenken, 2006), which is acquired through work experience, and is understood to influence the chance of firm survival (Dencker et al., 2009).”

“Previous studies have stated that knowledge-based factors influence a person's propensity to become an entrepreneur (Dencker et al., 2009; Ghio et al., 2015).”

“…al., 2009), benefits new venture processes and outcomes ranging from sales performance (Delmar & Shane, 2006) and new venture success (Stuart & Abetti, 1990) to longevity of the next business opened (Lafontaine & Shaw, 2016) and overall survival rates (Brüderl et al., 1992; Dencker et al., 2009).”

“Conversely, other scholars and practitioners emphasize that entrepreneurs are best served if they launch a venture as soon as possible so that they might learn from market reactions and customer feedback after the launch (Dencker et al., 2009).”

“If experience, for example, affects the likelihood of self-employment and the subsequent earnings generated simultaneously, the error terms of the decision to become self-employed are correlated with the outcome regression (earnings) (Dencker, Gruber, and Shah 2009; Unger et al. 2011).”