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Keywords:

  • spin-out;
  • parent hostility;
  • performance;
  • entrepreneurship;
  • technology

Prior research has focused on the performance implications of positive or neutral parent-child relationships, but neglected negative, conflict-laden relationships. This study explores from an embeddedness perspective whether parent hostility (degree to which an incumbent firm disapproves of the spawning of a spin-out from within its ranks) affects spin-out performance and how spin-outs can effectively react to it. Analyses of 144 technology spin-outs support our arguments that spin-outs suffer negative consequences from hostility. These are less severe, however, if the spin-out pursues effective network development. Copyright © 2013 John Wiley & Sons, Ltd.