2013/08/03 by Michel A. Habib, Ulrich Hege, Pierre Mella-Barral +1 · 23 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Business #Economic Growth and Productivity #Economics #Empirical research #Entrepreneurship #Entrepreneurship Studies and Influences #Firm Innovation and Growth #Fishery #Industrial organization #Marketing #Microeconomics #New product development #Profitability index #Spawn (biology)
paper · doi:10.1287/mnsc.2013.1739
published in Management Science 59(12), 2790-2804 (Institute for Operations Research and the Management Sciences)
openalex publication_date 2013/08/03 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We analyze the implications of the decision to spawn or to retain a new product for the nature and evolution of the firm. In our model, a new product is spawned if the fit between the product and its parent firm organization is not adequate. We focus on the impact of the firm's history of spawning decisions on firm characteristics such as size, focus, profitability, and innovativeness, and analyze its role in shaping firm dynamics. In accordance with the empirical literature, our model predicts that older firms innovate less, spawn less, are more diversified and less profitable, and that firms with more valuable general or specialized resources innovate and spawn more. Echoing seemingly contradictory empirical findings, our model predicts that small, focused firms (large, diversified firms) innovate and spawn more, and are more profitable when sample heterogeneity is driven by the importance of organizational fit (the value of general resources). This paper was accepted by Bruno Cassiman, business strategy.