Comparative Advantages of Spin-off Firms: An Evolutionary Perspective
Keywords:Spinoffs, evolutionary view, transfer of routines, organizational learning, social capital
AbstractAs predicted by evolutionary economics, historical antecedents matter when it comes to the relationship between survival of entrants and organizational capabilities. Spinoff firms provide an exemplary case of such relationship where the founders’ pre-entry capabilities that are inherited from the parent firm increases their survival chances. Looking closer and deeper to the evolutionary spinoff success mechanisms, I examine three specific genetic features which make spinoff firms more advantageous compared to other entrants; namely 1) Genotype: Transfer of blueprint, 2) Phenotype: Organizational learning, and 3) Memes: Informal relations and social capital. A detailed theoretical analysis of each mechanism prevails how they function and provide sustainable competitive advantage to spinoff firms. Testable hypotheses are provided about each mechanism.
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