All authors contributed equally to the study and the names are listed in random order.
Growing pains: Pre-entry experience and the challenge of transition to incumbency†
Article first published online: 22 AUG 2011
Copyright © 2011 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 33, Issue 3, pages 252–276, March 2012
How to Cite
Chen, P.-L., Williams, C. and Agarwal, R. (2012), Growing pains: Pre-entry experience and the challenge of transition to incumbency. Strat. Mgmt. J., 33: 252–276. doi: 10.1002/smj.954
- Issue published online: 4 JAN 2012
- Article first published online: 22 AUG 2011
- Accepted manuscript online: 1 AUG 2011 09:22AM EST
- Manuscript Revised: 27 JUL 2011
- Manuscript Received: 15 JUL 2009
- dynamic capabilities;
We examine how entrepreneurial entry by diversifying and de novo firms in new industries leads to different levels of performance. We propose that these types of firms differ in dynamic capabilities, which help them overcome growth impediments and transition to incumbency in the industry. Growth impediments arise at larger size, older tenure levels in industry, and after technological discontinuities. Because of their prior experience, diversifying firms are better equipped to handle the challenges of impediments to growth. Meanwhile, de novo firms, ostensibly tailor-made for the targeted industry, are more likely to stumble over these growth challenges, and eventually lag behind diversifying firms. We find support for our hypotheses using a near census of firms in the U.S. wireless telecommunications industry over the 1983–2004 period. Copyright © 2011 John Wiley & Sons, Ltd.