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Cited by 2,751Private Equity and Venture CapitalEntrepreneurship Studies and InfluencesInnovation and Knowledge Management

Interorganizational Endorsements and the Performance of Entrepreneurial Ventures

Stuart, Toby E., Hoang, Ha, Hybels, Ralph C.·1999·Administrative Science Quarterly
DOI 10.2307/2666998
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Abstract

This paper investigates how the interorganizational networks of young companies affect their ability to acquire the resources necessary for survival and growth. We propose that, faced with great uncertainty about the quality of young companies, third parties rely on the prominence of the affiliates of those companies to make judgments about their quality and that young companies “endorsed” by prominent exchange partners will perform better than otherwise comparable ventures that lack prominent associates. Results of an empirical examination of the rate of initial public offering (IPO) and the market capitalization at IPO of the members of a large sample of venture-capital-backed biotechnology firms show that privately held biotech firms with prominent strategic alliance partners and organizational equity investors go to IPO faster and earn greater valuations at IPO than firms that lack such connections. We also empirically demonstrate that much of the benefit of having prominent affiliates stems from the transfer of status that is an inherent byproduct of interorganizational associations.

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Crossref · 10.2307/2666998

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Each is checked against this paper’s own text: does it say what the citing paper says it does?

  • The reputation-enhancing benefits of certifications come from assurance about performance in a domain and endorsement by prominent respected actors.

    “the reputation-enhancing benefits of certifications are derived from two primary factors: certifications provide assurance about an organization's level of performance in a given domain, and they represent a powerful signal of endorsement by other prominent and respected actors”

    From Strategic Silence: Withholding Certification Status as a Hypocrisy Avoidance Tactic (2018) · cites this paper as Stuart, Hoang, and Hybels, 1999

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Authors
Stuart, T. E., Hoang, H., & Hybels, R. C.
Affiliations
  • University of Chicago (US)
  • Case Western Reserve University (US)
  • Leadership in Medicine, Inc.
ORCID
Venue
Administrative Science Quarterly
Publisher
JSTOR
Published
1999-06
Volume
44
Issue
2
Pages
315-349
ISSN
  • 0001-8392 (ISSN-L)
  • 1930-3815
DOI
10.2307/2666998
OpenAlex
W2014740757
Cited by
2,751
References
2
Citations by year
2026: 82 · 2025: 74 · 2024: 76 · 2023: 94 · 2022: 105 · 2021: 115 · 2020: 128 · 2019: 123 · 2018: 141 · 2017: 127 · 2016: 120 · 2015: 132 · 2014: 130 · 2013: 166 · 2012: 155
FWCI
125.91
Type
journal article
Language
en
Open access
closed
Licence
journals.sagepub.com/page/policies/text-and-data-mining-license (tdm)
Locations
Administrative Science Quarterly (publishedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Private Equity and Venture Capital
  • Social Sciences › Business, Management and Accounting › Management of Technology and Innovation › Entrepreneurship Studies and Influences
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Innovation and Knowledge Management
Keywords
interorganizational networks, young firms, entrepreneurial firms, strategic alliances, IPO timing, IPO valuation, biotechnology companies, venture capital, resource acquisition, venture performance

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