Knowledge inheritance and performance of spinouts

Abstract

We investigate the impact of knowledge inheritance by vertical spinouts originating from user and supplier industries on performance. We test whether spinouts from a supplier or user industry perform better than focal industry spinouts and de novo entrants. Using longitudinal micro data for the Portuguese molds and plastics industries we find that vertical user and supplier spinouts perform better in terms of survival (but not in terms of early sales) than focal industry spinouts, and all types of spinouts perform better than de novo entrants. The results suggest that vertical spinouts possess specific knowledge that might be more valuable than that of focal industry spinouts, while spinouts originating from suppliers underperform those originating from users.