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Are corporate affiliations conducive to nascent entrepreneurship?

Author

Listed:
  • Christian Hopp

    (Bern University of Applied Sciences)

  • Gernot Pruschak

    (Bern University of Applied Sciences)

  • Michel Krebs

    (Bern University of Applied Sciences)

Abstract

Founding an entrepreneurial venture does not comprise a dichotomous choice between market entry and non-entry; instead, a wide variety of entrepreneurial strategies are available to the nascent entrepreneur. Using data from the second Panel Study of Entrepreneurial Dynamics (PSED II), a representative sample of nascent entrepreneurial activity in the United States, this study documents that nascent entrepreneurs generally choose between founding an independent new venture and following a type of corporate-affiliated entrepreneurial strategy (CAES), such as a franchise, spin-off, or similar approach. The success of this decision is contingent upon entrepreneurs’ stock of human capital. Relevant industry experiences tend to reduce the likelihood of an entrepreneur employing a CAES, while managerial experience and previous start-up experience increases the probability. Overall, those nascent entrepreneurs who follow a CAES are more likely to achieve a first positive cash-flow; this highlights the benefits of corporate affiliations in the field of new venture founding.

Suggested Citation

  • Christian Hopp & Gernot Pruschak & Michel Krebs, 2024. "Are corporate affiliations conducive to nascent entrepreneurship?," International Entrepreneurship and Management Journal, Springer, vol. 20(3), pages 2241-2262, September.
    • Handle: RePEc:spr:intemj:v:20:y:2024:i:3:d:10.1007_s11365-024-00998-y
    DOI: 10.1007/s11365-024-00998-y
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