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A Model of Venture Creation in New Industries

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  • Pieter A. VanderWerf

Abstract

The peculiarities of new industries make them particularly favorable to the creation of new ventures. The ventures arise from among those parties that have access to Information about the new product, a community that expands over time. But certain activities of the creation process—especially Information gathering and fundraising—stop many ventures from continuing. Moreover, these constrictions In the process are Influenced by past levels of success of the process Itself. This sets up feedback mechanisms that regulate creation rates In various patterns, but eventually lower them to near zero, completing the familiar cycle of new industry entries.

Suggested Citation

  • Pieter A. VanderWerf, 1993. "A Model of Venture Creation in New Industries," Entrepreneurship Theory and Practice, , vol. 17(2), pages 39-47, January.
    • Handle: RePEc:sae:entthe:v:17:y:1993:i:2:p:39-47
    DOI: 10.1177/104225879301700204
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    References listed on IDEAS

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    1. R. E. Caves & M. E. Porter, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(2), pages 241-261.
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    4. Lemelin, Andre, 1982. "Relatedness in the Patterns of Interindustry Diversification," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 646-657, November.
    5. Orr, Dale, 1974. "The Determinants of Entry: A Sudy of the Canadian Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 58-66, February.
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    Cited by:

    1. Zahra, Shaker A., 1996. "Technology strategy and new venture performance: A study of corporate-sponsored and independent biotechnology ventures," Journal of Business Venturing, Elsevier, vol. 11(4), pages 289-321, July.
    2. Vesa Puhakka, 2007. "Effects of Opportunity Discovery Strategies of Entrepreneurs on Performance of New Ventures," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 16(1), pages 19-51, March.
    3. Michail Kouriloff, 2000. "Exploring Perceptions of A Priori Barriers to Entrepreneurship: A Multidisciplinary Approach," Entrepreneurship Theory and Practice, , vol. 25(2), pages 59-80, December.
    4. Linda F. Tegarden & Ann E. Echols & Donald E. Hatfield, 2000. "The Value of Patience and Start-up Firms: A Re-Examination of Entry Timing for Emerging Markets," Entrepreneurship Theory and Practice, , vol. 24(4), pages 41-58, July.

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