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| Content Provider | Springer Nature Link |
|---|---|
| Author | Cefis, Elena Marsili, Orietta |
| Copyright Year | 2011 |
| Abstract | This paper examines the way that the exit behavior of entrepreneurial firms is shaped by their innovative capabilities, and the technology environment in which they operate. We distinguish between exit by closing down activity and exit by merger or acquisition (M&A). Using a large sample of Dutch manufacturing firms, we explore the relationship between firm exit, age and innovative capabilities, in high and low innovation intensive industries. We find that for entrepreneurial firms, innovation may go some way towards compensating for the liability of newness, but also makes them more attractive M&A targets. More specifically, entrepreneurial firms in high-tech industries do not seem to improve their chances of survival by innovating; when technological change is rapid, innovation, especially in products, is necessary to participate in the innovation race in an industry, but is not sufficient to guarantee survival. In contrast, in low-tech industries, process innovation is a critical condition for the survival of entrepreneurial firms. In this context, entrepreneurial firms that are able to bring new product ideas, introducing ‘exceptional’ variations into a stable environment, are most likely to exit by M&A, thereby transferring their knowledge and capabilities to the incumbent firms. |
| Starting Page | 473 |
| Ending Page | 498 |
| Page Count | 26 |
| File Format | |
| ISSN | 09369937 |
| Journal | Journal of Evolutionary Economics |
| Volume Number | 21 |
| Issue Number | 3 |
| e-ISSN | 14321386 |
| Language | English |
| Publisher | Springer-Verlag |
| Publisher Date | 2011-01-05 |
| Publisher Place | Berlin, Heidelberg |
| Access Restriction | One Nation One Subscription (ONOS) |
| Subject Keyword | Mergers and acquisitions Firm exit Innovation Entrepreneurship Economic Theory Economics general International Economics |
| Content Type | Text |
| Resource Type | Article |
| Subject | Economics and Econometrics Business, Management and Accounting |
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