A matter of salience? The curvilinear effect of experience heterogeneity on firm performance in the US venture capital market Online publication date: Mon, 02-Feb-2015
by Yi Tang; Bilian Ni Sullivan
International Journal of Strategic Change Management (IJSCM), Vol. 5, No. 4, 2014
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.
Online publication date: Mon, 02-Feb-2015
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