Title: A matter of salience? The curvilinear effect of experience heterogeneity on firm performance in the US venture capital market

Authors: Yi Tang; Bilian Ni Sullivan

Addresses: Faculty of Business, Department of Management, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong ' Department of Management, HKUST Business School, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong

Abstract: Drawing on organisational learning research, this study proposes that in a given context, due to experience salience and organisational resistance to organisational adaption to new information, the impact of experience heterogeneity on firm performance is a U-shaped relationship: firms can benefit from either highly homogeneous or highly heterogeneous experiences but not from the moderate level of experience heterogeneity. Hypotheses are developed and tested using a large sample of US venture capital firms during 1995-2003. The U-shaped curvilinear relationship between experience heterogeneity and firm performance was found true for both a firm's own experiences and the experiences of the firm's network partners. The curvilinear effect of a firm's own experience heterogeneity was moderated by the firm's network status, while the effect of the firm's network partners' experience heterogeneity was moderated by the firm's structural holes in the network.

Keywords: organisational learning; experience heterogeneity; attention; network status; structural holes; venture capital firms; curvilinear effect; firm performance; USA; United States; organisational resistance; organisational change; network partners.

DOI: 10.1504/IJSCM.2014.067292

International Journal of Strategic Change Management, 2014 Vol.5 No.4, pp.297 - 320

Received: 25 Nov 2013
Accepted: 10 Sep 2014
Published online: 02 Feb 2015 *

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