A knowledge-based view of managing dependence on a key customer: Survival and growth outcomes for young firms

Yli‐Renko, Helena; Denoo, Lien; Janakiraman, Ramkumar

doi:10.1016/j.jbusvent.2020.106045

Cited by 25 publications

(9 citation statements)

References 85 publications

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“…This is consistent with our hypothesis H1a that start-ups tend to invest more when uncertainty increases. The finding is also in line with start-ups have different investment timing and operational timing relative to other firms (Swinney et al, 2011;Nanda and Rhodes-Kropf, 2013;Xia et al, 2018;Yli-Renko et al, 2020;Archibald and Possani, 2021). As mature firms are likely to delay venture investment during times of high EPU (Wang et al, 2014), it creates good investment timing for start-up firms to join in the competition for market share.…”

Section: Baseline Regressionssupporting

confidence: 55%

“…The finding is also in line with start-ups have different investment timing and operational timing relative to other firms (Swinney et al. , 2011; Nanda and Rhodes-Kropf, 2013; Xia et al ., 2018; Yli-Renko et al ., 2020; Archibald and Possani, 2021). As mature firms are likely to delay venture investment during times of high EPU (Wang et al.…”

Section: Resultsmentioning

confidence: 99%

“…Consequently, a start-up's investment decisions are to maximize the probability of survival (Xia et al, 2018). Then the timing of the investment or the investment opportunity becomes more important (Swinney et al, 2011;Yli-Renko et al, 2020;Archibald and Possani, 2021). This essential difference between mature firms and start-ups leads to the argument that the impact of EPU on start-up firms' investments may not be the same as that on mature firms.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

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Start-up firms' investments: when economic policy uncertainty matters?

Hoang

Nguyen

2023

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PurposeThis study examines the impact of economic policy uncertainty (EPU) on investment decision-making of start-up firms in Japan. While existing literature suggests firms generally retrench investment under EPU, the authors argue that start-ups’ investment behaviours are likely different given the fact that start-ups always have to compete for survival.Design/methodology/approachThe authors investigate the impact of general economic policy and policy-specific uncertainty, including monetary policy, fiscal policy, trade policy and exchange rate policy uncertainty, on corporate investment of start-up firms using multiple fixed-effect regression. A wide range of robustness and endogeneity tests are conducted to ensure the validity and soundness of the empirical findings.FindingsThe authors document a positive effect of EPU on start-up investment, to suggesting that the investment behaviour of start-ups is backed by venture capital distinct from that of mature firms. The results show that start-ups are more vulnerable during the changes in trade and exchange rate policies; uncertainties in monetary and fiscal policies do not restrain firms' investment. However, the effect varies in the cross-sections. Financial constraints have a moderating effect on the relation-ship between EPU on start-up investment. Institutional investors have an incremental effect on the positive relationship between EPU and start-up investment by encouraging risky investments.Originality/valueThis is the first study to investigate how start-up investment is influenced by EPU, thus providing a new understanding of the investment behaviour of start-up firms during uncertainty. Further investigation sheds light on the roles of institutional and managerial ownership in this newfound relationship.

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Section: Baseline Regressionssupporting

confidence: 55%

Section: Resultsmentioning

confidence: 99%

Section: Hypothesis Developmentmentioning

confidence: 99%

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Start-up firms' investments: when economic policy uncertainty matters?

Hoang

Nguyen

2023

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“…Likewise, the entrepreneurship and business-to-business marketing literature has just scratched the surface on how startups organize and operate their supply chains (e.g. Ireland and Webb, 2007; La Rocca et al , 2019; Yli-Renko et al , 2020) or downstream strategic alliances (e.g. Baum et al , 2000; Dutta and Hora, 2017; La Rocca et al , 2013).…”

Section: Introductionmentioning

confidence: 99%

Startups in the supply chain ecosystem: an organizing framework and research opportunities

Wagner¹

2021

IJPDLM

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PurposeStartups are associated with innovation, emerging technologies, digitalization and disruptive business models. This article aims to provide a better understanding of startups in logistics and supply chain management, organizes the contemporary discussion around startups in the supply chain ecosystem and outlines opportunities for future research.Design/methodology/approachThis study draws on the prior supply chain, logistics and entrepreneurship literature and discusses key themes along the six identified startup issues. Furthermore, it proposes several perspectives and theories for grounding future research.FindingsThis study discusses the roles and success factors of startups in the supply chain ecosystem. It lays out how startups need to organize their own supply chains, how supply chain management (SCM) startups incubate and accelerate their ventures, the financing of SCM startups, as well as their positions as service providers, suppliers and customers.Originality/valueThis research brings together the sparse and dispersed literature on startups in the supply chain ecosystem, motivating scholars to increase the involvement of startups as important stakeholders in SCM research.

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“…Other scholars have shown that a firm's existing customers, especially those that a firm is highly dependent on, can drive the direction of innovation. Firms may focus their R&D on incremental improvements that their key customers ask for but that may not necessarily be in the firm's best interest or lead to the most innovative outcomes, thereby potentially even threatening the survival of the firm (Christensen & Bower, 1996; Yli‐Renko, Denoo, & Janakiraman, 2020). In the context of an emerging industry, however, young firms will be faced with a multitude of lead‐user early customers spanning a wide range of different types of needs and market domains.…”

Section: Theory and Hypothesesmentioning

confidence: 99%

The impact of customer ties and industry segment maturity on business model adaptation in an emerging industry

Denoo

Yli‐Renko

Clarysse

2021

Strategic Entrepreneurship

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Research Summary Why do some young firms change their business models while others do not? Why do some firms make small changes, while others make more substantial changes? And does industry context matter? Drawing on organizational learning theory and utilizing a unique database tracking 187 young firms through the first decade of the mobile health industry, we examine the role of customers in young firms' business model adaptation. We find a positive impact of customer portfolio breadth (capturing the number and diversity of customers) on both the likelihood and degree of business model change. Importantly, industry segment maturity moderates this relation: customer effects are strongest in the earliest, most uncertain stages. Our study provides a rare view into how a new industry and its young ventures co‐evolve. Managerial Summary Customers have been viewed as critical in a start‐up venture's search for an initial business model, but their role in young firms' business model adaptation has not been examined. In this study, we show that a young firm's customer portfolio breadth is an important driver of business model change, especially at the earliest, most uncertain stages of an industry. Our results highlight the value of customers as sources of knowledge in emerging industries, and suggest that when making decisions about establishing and fostering customer ties, entrepreneurs should consider the number and diversity of those ties in the context of the maturity of the young firm's industry segment.

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A knowledge-based view of managing dependence on a key customer: Survival and growth outcomes for young firms

Cited by 25 publications

References 85 publications

Start-up firms' investments: when economic policy uncertainty matters?

Start-up firms' investments: when economic policy uncertainty matters?

Startups in the supply chain ecosystem: an organizing framework and research opportunities

The impact of customer ties and industry segment maturity on business model adaptation in an emerging industry

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