Defining the Relationship among Founding Resources, Strategies, and Performance in Technology‐Intensive New Ventures: Evidence from the Semiconductor Silicon Industry*^*

* Earlier versions of this paper were published in the 2005 Academy of Management Best Paper Proceedings and the 2004 United States Association for Small Business and Entrepreneurship Annual Conference Proceedings.

Abstract

The degree to which a firm's performance is dependent on its resources and strategies is widely debated in the literature. We examine this issue by analyzing historical data on the entire population of new independent firms started worldwide in the semiconductor silicon industry for the first 50 years of its existence. We measure resources (managerial capabilities and technological competencies) and strategies (emphasis on demand pull or technology push) at the time of founding and test their relationship with each other as well as with multiple measures of performance (lifespan and best year's sales). We find that firms founded on managerial capabilities emphasize demand‐pull strategies at founding, whereas firms founded upon technological competencies emphasize technology‐push strategies at founding. We also find that firms emphasizing technology‐push strategies perform better than firms emphasizing demand‐pull strategies. Lastly, we find that though managerial capabilities are related to a firm's best year's sales, this relationship is mediated by the firm's founding strategy.

* Earlier versions of this paper were published in the 2005 Academy of Management Best Paper Proceedings and the 2004 United States Association for Small Business and Entrepreneurship Annual Conference Proceedings.

* Earlier versions of this paper were published in the 2005 Academy of Management Best Paper Proceedings and the 2004 United States Association for Small Business and Entrepreneurship Annual Conference Proceedings.

Notes

* Earlier versions of this paper were published in the 2005 Academy of Management Best Paper Proceedings and the 2004 United States Association for Small Business and Entrepreneurship Annual Conference Proceedings.

1 Reliability coefficients cannot be calculated for factors with negatively loaded items.

2 The results of this factor analysis are not reported herein but are available from the authors upon request.

3 The authors thank an anonymous reviewer for suggesting this approach.

4 The authors thank an anonymous reviewer for suggestions regarding the operationalization of this variable.

5 None of these firms had publicly traded stock so actual sales data was not publicly available.

6 Regions defined by the U.S. Census Bureau: Northeast (Connecticut, Massachusetts, Maine, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Virginia), South (Alabama, Arkansas, District of Columbia, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Vermont, and West Virginia), Midwest (Iowa, Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, North Dakota, Nebraska, Ohio, South Dakota, and Wisconsin), and West (Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana New Mexico, Nevada, Oregon, Utah, Washington, and Wyoming).

7 Only one firm was located in the South (Texas) and only one firm was located in the Midwest (Michigan).

8 Note that Goodman tests are a variation of the more popular Sobel tests. We do not conduct Sobel tests, however, as they are not appropriate for small samples.

9 The authors thank an anonymous reviewer for raising this issue.

Additional information

Notes on contributors

Scott L. Newbert

Scott L. Newbert is an assistant professor of management in the Villanova Business School at Villanova University.

Bruce A. Kirchhoff

Bruce A. Kirchhoff is distinguished professor of entrepreneurship and director of the Technological Entrepreneurship Program at New Jersey Institute of Technology.

Steven T. Walsh

Steven T. Walsh is the Alfred Black Professor of Entrepreneurship, director of the Technology Entrepreneurship Program, and codirector of the Technology Management Center at the University of New Mexico’s Anderson School of Management.