Inventive Process as a Recombinant Search over Complex Landscape: Evidence from the Disk Drive Industry

Invention, Recombinant search, Complexity, NK Model, Simulation, Interdependence

The effect of technological complexity on innovation performance, employee entrepreneurship and mobility: three essays

Technological innovation, knowledge diffusion and employee entrepreneurship and mobility are closely related phenomena. Multiple literature streams in strategy, entrepreneurship and technology management focus on explaining them. However, relatively little is known about the micro-level variation in technological tasks as their driver. To improve our understanding of the role technology plays in these phenomena, I examine how the complexity of the technological problems that employees solve affects innovation performance and employees??? choices about entrepreneurship and mobility. In essay 1 I examine whether modeling the innovative process as an iterative and adaptive search of boundedly rational agents is a valid approach. I develop a novel measure of technological complexity and empirically analyze how technological complexity affects innovation performance. In essay 2 I develop a model connecting attributes of technological tasks with the probability of idea rejection within incumbent firms. I show that rejection of profitable ideas within incumbent firms may occur without asymmetric information, incomplete contracts or resource constraints. In essay 3 I look at how technological complexity affects decisions to engage in employee entrepreneurship and mobility within the context of the U.S. semiconductor industry. The dissertation highlights a new driver of innovation patterns, knowledge flows and employee entrepreneurship and mobility with implications for firm performance and competitive dynamics

Performance differentials between diversifying entrants and entrepreneurial start-ups: a complexity approach

We investigate the relationship between firms' entry characteristics and their subsequent performance as contingent on environmental turbulence and stage of industry life cycle by simulating industry as an NKC landscape. Diversifying entrants differ from entrepreneurial start-ups in terms of the complexity of their routines. We posit that diversifying entrants outperform entrepreneurial start-ups when turbulence is high. Further, learning-possible in later industry stages-disproportionately favors entrepreneurial start-ups

Equity Crowdfunding and Access to Capital for User Entrepreneurs: Evidence from a Randomized Field Experiment

We examine whether equity crowdfunding democratizes access to funding for nontraditional user entrepreneurs. User entrepreneurs start by creating a product to serve their own unmet needs with no expectations of monetary profit, then later decide to commercialize the product through entrepreneurship. In contrast, traditional (producer) entrepreneurs take a more profit-driven path to entrepreneurship and start by identifying an opportunity that has commercial potential. Through a randomized field experiment, we randomly reveal to some investors that a firm producing a product used by musicians is founded by a musician and conceal this founder-related information from other investors. Revealing the information suggests that the firm is a user innovator firm and concealing it suggests that the firm is a traditional producer firm. We find that investors are significantly more interested in the traditional producer firm. Through an additional field experiment, we identify that the bias against user entrepreneurs is statistical (based on a response to limited information) rather than taste based (based on an idiosyncratic dislike). Our findings suggest that user entrepreneurs can mitigate investor bias by displaying signals of quality such as those regarding firm growth and broad product appeal

Using what you know: patented knowledge in incumbent firms and employee entrepreneurship

Prior studies have shown that the acquisition of relevant knowledge by employees in existing firms is associated with the creation of new firms through employee entrepreneruship. Some researchers propose that the transition to entrepreneurship may be explained by established firms undervaluing knowledge created by employees, whereas other scholars maintain that firm strategies may lead to the underutilization of knowledge. We ask the question of which of these drivers is more pronounced as an explanation of employee entrepreneurship and what technological factors matter in this relationship. Analyzing a unique data set, we find that the likelihood of employee entrepreneurship increases with the inventor’s assessment of the value of a patent for an invention developed while at the incumbent firm but dramatically decreases when the invention protected by the patent is commercialized by the firm, licensed to third parties, interdependent with other firms’ inventions protected by patents, or technologically broad. We also find that conditional on high valuation by the inventor, a matching high valuation by the firm further increases the likelihood of transitioning to entrepreneurship. In combination, we show that a situation when both the inventor and the firm consider the invention valuable but the firm ends up not commercializing the invention is more predictive of employee entrepreneurship than simple differences in assessing the value of the invention. The study refines our understanding of the drivers of entrepreneurship by underscoring the “strategic” explanation of employee entrepreneurship

Who Leaves, Where to, and Why Worrry? Employee Mobility, Employee Entrepreneurship, and Effects on Source Firm Performance

We theorize that differences in human assets’ ability to generate value are linked to exit decisions and their effects on firm performance. Using linked employee-employer data from the U.S. Census Bureau on legal services, we find that employees with higher earnings are less likely to leave relative to employees with lower earnings, but if they do leave, they are more likely to move to a spin-out instead of an incumbent firm. Employee entrepreneurship has a larger adverse impact on source firm performance than moves to established firms, even controlling for observable employee quality. Findings suggest that the transfer of human capital, complementary assets, and opportunities all affect mobility decisions and their impact on source firms.

What Do I Take With Me: The Impact of Transfer and Replication of Resources on Parent and Spin-Out Firm Performance

Focusing on entrepreneurial ventures created by employees leaving a firm, our study examines the differential impact of knowledge transfer and knowledge spillovers on both parent and spin-out performance. While extant research often uses knowledge transfer and spillover interchangeably, our study distinguishes between the two based on the “rivalness” of the relevant knowledge. We theorize that both knowledge transfer (proxied by the size of the exiting employee team) and knowledge spillovers (proxied by the experience of the exiting employee team) will aid spin-out performance. However, knowledge transfer, being more rival, will have a greater adverse impact than knowledge spillovers on parent firm performance. Using U.S. Census Bureau linked employee-employer data from the legal services industry, we find support for our hypotheses. Our study thus contributes to extant literature by highlighting a key dimension of knowledge — rivalness — and the differential competitive dynamics effect of resources with varying degrees of rivalness.

Returning to the Frontier of Contingency Theory of Organizational and Institutional Designs

Much has been learned, and even more needs to be learned, about designing organizations and institutions. Since the 1960s this research has evolved from contingency to configuration, to complementarity, to complexity and creative theories of organizing. This chapter reviews these evolving theories (better called perspectives) and urges scholars to return to the frontier of organization studies by addressing an important new agenda in designing organizations with promising new research methods