Configurations of business founder resources, strategy, and environment determining new venture performance

ABSTRACT

We advance a configurational perspective that assumes a new venture’s performance, operationalized as profitability in this study, is determined by interdependencies among its founder(s)’s resources (i.e., human, social, and financial capital), its strategy, and environmental munificence. Using Rule Ensembles, a semiparametric set-theoretic method, we conduct an abductive investigation using a sample of 853 new ventures. The Rule Ensembles technique identifies five multivariate interdependencies (rules) that enhance new venture profitability and two that reduce it. Indicators of business founder resources are involved in all of the seven model rules. Four configurational rules, including a strategy and/or environmental component, equally emerge.

KEYWORDS:

• Configurational approach
• new venture performance
• business founder

Acknowledgments

We appreciate the financial support provided by the Flemish Research Fund (G.0599.05N) and the former Policy Research Center for Entrepreneurship, Enterprises, and Innovation. We also appreciate the helpful suggestions of our anonymous reviewers and Associate Editor Mark Freel.

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Additional information

Funding

This work was supported by the Policy Research Center for Entrepreneurship, Enterprises, and Innovation (Flanders); Flemish Research Fund [G.0599.05N].