Session 119

Competition and entrepreneurial entry

Track K

Date: Monday, October 5, 2015


Time: 11:15 – 12:30

Common Ground

Room: Plaza Court 3


  • Elena Novelli, City University London

Title: A Tale of Two Ventures: Search and Linking in Tech Push and Market Pull Start-ups


  • Bart Clarysse, ETH Zurich
  • Erwin Danneels, University of South Florida
  • Robin De Cock, Ghent University

Abstract: We identify two venture types based on the type of opportunity that forms the basis for venture creation. Market pull ventures start from an un/underserved market need and identify a technological solution, while tech push ventures start with a technology at hand and seek a market to apply it to. Therefore market-pull and tech-push ventures need to engage in technological and market search. Based on a longitudinal study of 151 technology-based ventures, we found contrasting effects of scanning and founders' experience and personality. Market scanning, in-depth technological experience, broad market experience and key founders high in openness to experience benefit tech push ventures. In contrast, technology scanning, in-depth market experience, broad technological experience, and conscientious key founders foster the initial success of market pull ventures.

Title: Casting Shadows: The Use of Stigma to Deter Entry by Innovative New Ventures


  • David Deeds, University of St. Thomas
  • Taman Powell, Cardiff University

Abstract: Creating a Halo Effect through affiliation with high status incumbents by innovative new ventures has been demonstrated to be a successful strategy for increasing legitimacy and increasing capital flows and firm value (Baum and Oliver, 1991; Stuart et al., 1999). But what of the reverse? Can a stigmatized organization use its stigma to decrease an innovative new venture’s status, legitimacy, access to resources and odds of success? Can stigma be used by incumbents as a strategic weapon to deter support and adoption of disruptive innovation or entry by innovative new ventures? This study will attempt to address these questions based on a qualitative study of the battle between big tobacco companies and new ventures in the emerging e-cig industry.

Title: Full or Part-time Entry into Entrepreneurship: Demand and Supply-side Factors Affecting Entry Mode and Performance


  • Alena Marand, University of Maryland
  • Benjamin Campbell, Ohio State University
  • Florence Honore, Iowa State University
  • Rajshree Agarwal, University of Maryland

Abstract: Recent research on entrepreneurial entry has begun to challenge the traditional entrepreneurial entry dichotomy where individuals make a distinct choice between entrepreneurship and wage employment by highlighting hybrid or “part-time entrepreneurship”. This literature uses real-options logic, where the worker has the right, but not the obligation to enter into full-time entrepreneurship after an initial investment is made via their engagement in part-time entrepreneurship. We build on this line of research, which has focused on supply-side characteristics driving individuals’ choices to enter into part-time entrepreneurship, and argue that we must also consider demand-side factors when seeking to explain outcomes of entrepreneurial decision processes. In doing so, we develop and test our theory of entrepreneurial entry using longitudinal data from the Longitudinal Employer-Household Dynamics program, which allows us to concurrently identify entrepreneurial entry decisions, individual wages, and firm performance outcomes.

Title: Opportunity Cost versus Competition: Testing Alternative Explanations of Density Dependence


  • Gorkem Aksaray, Emory University
  • Peter Thompson, Georgia Institute of Technology

Abstract: This study reports the results of a new examination of the well-established negative effect of localized density on survival in established industries. In the standard theory, this effect is generically attributed to resource competition, where both “resource” and “competition” are broadly defined. We posit and test the competition story against two alternative mechanisms – associations between local density and the opportunity cost of entrepreneurs’ time, and geographic variations in minimum efficient scale. Using a sample from the confidential geocoded NLSY, we find evidence that consistently points in favor of the opportunity cost mechanism.

Title: Real Options Reasoning and Affordable Loss Logics in Strategic Direction-Setting by Internationalizing Entrepreneurs


  • Richard Hunt, Virginia Polytechnic Institute

Abstract: Drawing upon the theories of real options and affordable loss, this study examines why and how internationalizing entrepreneurs willingly and rationally contend with extreme uncertainty in the pursuit of new market opportunities. Through a transaction-level longitudinal analysis of 1,040 small lumber exporters from 52 countries, we develop and test a framework wherein entrepreneurs pair affordable loss logics (ALL) with real options reasoning (ROR) to internationalize more quickly and profitably than those who employ either alone or neither. By explicating the mechanisms through which export-minded entrepreneurs capture the value-enhancing benefits of uncertainty, this study reinvigorates efforts to apply ROR to the sequential decision-making that uniquely characterizes opportunity exploration among entrepreneurs under conditions of irreducible uncertainty.

Title: The Effect of Regional Industry Diversity and New Knowledge on New Venture Exit Rates


  • Lawrence Plummer, University of Western Ontario
  • Simon Parker, University of Western Ontario
  • Silvia Reyes, University of Western Ontario

Abstract: The entrepreneurial development of regions is driven by factors that stimulate entrepreneurial entry and retard exit. Most research has focused on understanding the regional determinants of local entrepreneurial entry while giving less attention to factors that discourage exit. We draw attention to regional factors that should facilitate the adaptations new firms might pursue to avoid exit. We argue that regional features that favor adaptation will positively moderate the effect of agglomeration densities on exits. In the current study, we focus on the effects of knowledge spillovers and regional industrial diversity. We find that both new knowledge and industry diversity reduce entrepreneurial exit rates, but we also find that the exit-retarding effect of new knowledge is moderated by industry diversity.

All Sessions in Track K...

Sun: 08:00 – 09:15
Session 10: Entrepreneurship in Base-of-the-Pyramid Markets
Sun: 09:45 – 11:00
Session 11: Crowdfunding Research: Present and Future
Sun: 11:15 – 12:30
Session 12: Environmental Entrepreneurship: How and When do Entrepreneurs address Environmental Degradation?
Sun: 16:15 – 17:30
Session 50: Entrepreneurship and Institutional Environment
Sun: 17:45 – 00:00
Session 319: Entrepreneurship and Strategy Business Meeting
Mon: 08:00 – 09:15
Session 56: Family firms
Mon: 11:15 – 12:30
Session 119: Competition and entrepreneurial entry
Mon: 13:45 – 15:00
Session 53: New forms of entrepreneurial funding
Session 97: Accelerators, corporate VCs and new venture creation
Mon: 16:45 – 18:00
Session 59: Entrepreneurship in emerging markets
Session 98: Culture, institutions and entrepreneurship
Tue: 08:00 – 09:15
Session 54: Venture capital and angel financing
Session 118: Entrepreneurial orientation and strategic entrepreneurship
Session 217: Leadership and Governance in Family Firms
Tue: 11:00 – 12:15
Session 51: Academic entrepreneurship
Tue: 14:15 – 15:30
Session 58: Corporate VCs and spin-outs
Session 120: Creativity, knowledge spill overs and a venture's legitimacy
Tue: 15:45 – 17:00
Session 52: Entrepreneurial business models
Session 55: Entrepreneurship and cognitions
Tue: 17:30 – 18:45
Session 57: Entrepreneurial teams
Session 99: Governance and entrepreneurial finance

Strategic Management Society