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Founding scale and survival: double-edged effects of corporate sponsorship

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  • Hsien-Jui Chung
  • Hsuan Lo
  • Chun-Chung Chen

Abstract

This study examines the effects of founding scale on survival rates across independent and corporate-sponsored Taiwan securities firms. Empirical results confirm the positive effects of founding scale and corporate sponsorship on new venture survival. Results also indicate that when founding scale is large, corporate-sponsored new ventures have higher survival rates than independent ventures. However, when founding scale is smaller, the reverse is true: corporate-sponsored new ventures have lower survival rates than independent ventures. Therefore, corporate sponsorship comes off as a double-edged sword; new ventures may benefit from the parent's existent resources and social linkages, but also suffer from a loss of autonomy and control over major decisions.

Suggested Citation

  • Hsien-Jui Chung & Hsuan Lo & Chun-Chung Chen, 2009. "Founding scale and survival: double-edged effects of corporate sponsorship," The Service Industries Journal, Taylor & Francis Journals, vol. 31(6), pages 997-1009, May.
    • Handle: RePEc:taf:servic:v:31:y:2009:i:6:p:997-1009
    DOI: 10.1080/02642060903079113
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