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There's no fox like an old fox: Dimensions of entrepreneurial orientation and venture closure

  • Only a few scholars examined downsides of EO and suggest it may negatively affect survival. Previous research, which mainly focuses on mature companies, assumes that the relationship between EO and survival is constant. However, because firm characteristics and causal mechanisms change as young venture survive and grow into mature firms, the relationships between EO and survival could also change over time. We extend the EO literature by considering changing EO effects when venture grow into mature firms and by employing a multidimensional view on EO and identify isolating independent mechanisms for the influence of each dimension (i.e. innovativeness, proactiveness and risk-taking) on the survival of young ventures. While the nature of proactiveness on performance is rathe positive, risk-taking and innovativeness increases the variance of firm performance and thus the chances of failure. However, the latter can be separated according to whether the increase in variance occurs at a single point in time (risk-taking) or over timeOnly a few scholars examined downsides of EO and suggest it may negatively affect survival. Previous research, which mainly focuses on mature companies, assumes that the relationship between EO and survival is constant. However, because firm characteristics and causal mechanisms change as young venture survive and grow into mature firms, the relationships between EO and survival could also change over time. We extend the EO literature by considering changing EO effects when venture grow into mature firms and by employing a multidimensional view on EO and identify isolating independent mechanisms for the influence of each dimension (i.e. innovativeness, proactiveness and risk-taking) on the survival of young ventures. While the nature of proactiveness on performance is rathe positive, risk-taking and innovativeness increases the variance of firm performance and thus the chances of failure. However, the latter can be separated according to whether the increase in variance occurs at a single point in time (risk-taking) or over time (innovation) and whether the survivors have more money or more innovations. For young firms, innovativeness and risk-taking inhibit survival, while proactiveness promotes it, so the dimensions have divergent effects. As a consequence of the attrition of young ventures, the associations of innovativeness and risk-taking reverse when they grow older. Our empirical analyses are based on panel data of 8,518 young firms.show moreshow less

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Metadaten
Author: Martin Röder, Diemo UrbigORCiD, Christoph Stöckmann, Werner Bönte, Vivien D. ProcherORCiD
URL:https://www.researchgate.net/publication/379155763
URL:https://www.fgf-ev.de/wp-content/uploads/2023/09/G-Forum-2023-Programmgeruest_18-09-2023_Internet.pdf
Title of the source (English):26th Annual Interdisciplinary Conference on Entrepreneurship, Innovation and SMEs, 2023
Document Type:Conference publication peer-reviewed
Language:English
Year of publication:2023
Contributing Corporation:FGF - Forschungsnetzwerk Entrepreneurship, Innovation und Mittelstand e.V.
Tag:Entrepreneurial orientation; Entrepreneurship; Failure; Survival; time-varying Cox proportional hazard model
Faculty/Chair:Fakultät 5 Wirtschaft, Recht und Gesellschaft / FG ABWL, insbesondere empirische Unternehmensforschung und Transformation
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