The role of intrapreneurialexperience on independent and

corporate new ventures: evidence from Spain

Maribel Guerrero, Iñaki PeñaOrkestra-Basque Institute of Competitiveness.

Deusto Business School.

Agenda

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

Agenda

What we know …

(1) Entrepreneurship is important for economic growth.

• Vary greatly across different types of entrepreneurship,environmental contexts and conditions (Wennekers and Thurik1999; Westhead 1995).

(2) Human capital is a key determinant of any entrepreneurialaction (McMullen and Shepherd 2006; Hornsby et al. 1993; Shane etal. 2003).

(3) There are some differences in human capital betweenentrepreneurs & intrapreneurs. Parker (2011):

• entrepreneurs are characterized by a general human capital(knowledge, skills and experiences) useful for start-up creation,• intrapreneurs acquire a specific human capital from trainingprograms, experiences and learning process within existingorganizations that have an entrepreneurial focus (i.e., proactive,innovative and risk-taking oriented firms).

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

AgendaWhat we know …

Corporate entrepreneurship build a strong human architecture(i.e., management support, work discretion, reward system, timeavailability and organizational boundaries)

This fertile environments inside organizations help:

• to achieve organizational objectives (i.e., innovation, renewal orventuring) and

• indirectly generates a specific human capital in their employees(i.e., intrapreneurial experience).

Hornsby et al. (1993, 2002,)

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

AgendaWhat we do not know …

About the link between this specific human capital dimension(intrapreneurial experience) onto firm start-up (independentventuring & intra-venturing).

Our Objective

We attempt to fill this gap in the literature by testing the effectof individuals’ intrapreneurial experience on the number offirms created by independent entrepreneurs andintrapreneurs.

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

Agenda

From a theoretical point of view…

For one side, entrepreneurial action depends, to a large extent, onhow individuals combine:

(a) their motivations that vary in how they perceive the risk of expending resources before knowing the distribution of outcomes (Shane et al. 2003; Arenius and Minnitti 2005);

(b) their human capital (i.e. individual education, experiences and skills), which constitutes a firm-unique intangible asset (Bates 1990; Davidsson and Honig 2003); and

(c) the access to other resources such as financial and social capital, which may prompt (or hamper) the decision to start a new venture (Bosma et al. 2004).

For other side, the creation of intra-ventures refers to visibleentrepreneurial tendencies of a parent firm toward innovativeness, pro-activeness and risk taking (Covin and Slevin 1989; Lumpkin and Dess 1996;Miller 1983).

Previous studies Frameworks

Entrepreneurial

action (Locke 2000;

McMullen and

Shepherd 2006;

Shane et al. 2003;

Shane and

Venkataraman 2000)

Antecedents

Environmental

Individual

Perceptions

Motivations

(desirability)

Knowledge

(feasibility)

Entrepreneurial

action

Firm creation

High-Growth

(Autio 2007; Autio et

al. 2007; Autio and

Acs 2007, 2010)

Antecedents

Environmental

Individual

Resources

Human capital

Social capital

Financial

capital

Orientation

High aspirations

Innovation

Internationalization

Entrepreneurial

action

Firm creation

Firm

Performance

High-growth

Entrepreneurial

Orientation

(Covin and Slevin

1991; Lumpkin and

Dess 1996, 2001;

Miller 1983; Moreno

and Casillas 2008)

Moderators

Environmental

Organizational

Individual

Entrepreneurial

orientation

Risk taking

Innovativeness

Proactiveness

Autonomy

Competitive

aggressiveness

Performance

Sales growth

Market share

Profitability

Overall

performance

Corporate

Entrepreneurship (Antoncic and Hisrich

2001; Ireland et al.

2009; Hornsby et al.

1993, 2002, 2009,

forthcoming; Kuratko

et al. 2005a, 2005b;

Zahra 1991, 1993;

Zahra and Covin

1995; Zahra and

Garvis 2000)

Antecedents

Environmental

Organizational

Individual

Human System

Architecture

Human capital

Social capital

Entrepreneurial

orientation

Risk taking

Innovativeness

Proactiveness

Corporate

Entrepreneurship

Innovations

Venturing

Renewal

Performance

Growth

Profitability

Intrapreneurial

experiences &

entrepreneurial

action (proposed)

Antecedents

(individual,

organizational,

environmental)

Specific human

resources

(intrapreneurial

experience)

Individual

orientation

(risk taking, innovativeness

proactiveness)

Firm

creation

High-Growth

(innovation,

internationalization

and growth

aspiration)

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

AgendaFrom a theoretical point of view…

Hypothesis 1: Individuals with intrapreneurial experience are more likely to start up a firm than individuals who lack such experience.

Hypothesis 2: Individuals with intrapreneurial experience are more likely to start up intra-ventures than individuals who lack such experience.

(Boeker 1997; Zahra 1991, 1993; Zahra and Covin 1995; Zahra and Garvis 2000; Sebora and Theerapatvong 2010;

Parker 2011).

(Covin & Miles 2002; Parker 2011).

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

AgendaSample

Adult Population Survey (GEM in Spain)9277 observations adult individuals (18- to 64-year-old).

Methodology

We use a negative binomial regression model

The negative binomial regression model provides a solution tothe problem of over-dispersion and bias problems that we foundin our sample (Cameron and Trivedi 1998; Greene 2003; Hilbe2007).

Studies have used negative binomial regression methods to testsamples with similar characteristics to ours (Audrestch andLehmann 2005), Gregorio and Shane 2003) and Rothaermel2001).

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

AgendaDependent Variables: firm creation

Model A Model B

independent_venturing corporate_venturing

1 = individual that has recently created a new business (younger than 42 months old)

0 = otherwise

1 = (a) individual that has recently created a new venture for employer as part of his/her normal work

(b) is a full-time employee

0 = otherwise

Intra_experience 1= individual that has been involved in the development of new activities (i.e., new goods/services, new business, etc.) for her/his main employer during the last three years (Bosmaet al. 2010)

0=otherwise

Independent Variables

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

Agenda

Other Variables

Educ_higher 1=Higher education0=otherwise

Entre_experience 1=has shut down a business in the past 12 months0=otherwise

Investor_experience 1=has invested his or her own funds into private-held entrepreneurial ventures started by others during the past three years0=otherwise

Know_entrepreneur 1=indicating whether the individual knew other entrepreneurs who started a business in the past two years0=otherwise

PIncome_higher 1=indicating whether the individual’s annual income is higher than 30,000 Euros per year.0=otherwise

opportunity_recognition

1=if the individual perceives good opportunities0=otherwise

Skills 1= indicating whether the individual possesses the knowledge, skills and experience required to starting a business; 0 = otherwise

FearFailure 1= indicating whether the individual considers that fear of failure would prevent him or her from setting up a business.

Region_highincome 1= represents the Spanish regions with high level of GDP per capita respect to the media of all regions

Gender, Age

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

AgendaModel I

Independent_venturing

Model II

Corporate_venturing

Parameters B S.E. Sig. B S.E. Sig.

(Intercept) -5.369 .5629 *** -7.369 1.396 ***

Intra_experience 2.251 .1442 *** 3.025 .3041 ***

Educ_higher .079 .0921 -.261 .2284

Entre_experience .806 .2050 *** .263 .7155

IInvestor_experience .048 .1821 .964 .3394 ***

Know_entrepreneurs .729 .0893 *** .845 .2448 ***

PIncome_higher .197 .0912 * .906 .2883 ***

StartupOpportunity_recognition .427 .0988 *** .233 .2603

Skills 1.535 .1380 *** 1.419 .3554 ***

FearFailure -.411 .0898 *** -.787 .2502 ***

Gender .078 .0883 .372 .2355

Age .089 .0292 *** .048 .0632

Age2 -.001 .0004 *** -.001 .0008

Region_highincome -.066 .0868 .132 .2265

(Scale) 1.000 1.000

(Negative binomial) 1.000 1.000

Omnibus test = -2(LBo-LB 501.502 196.400

P-Value *** ***

Pseudo R2= 1 - (LB / LBo) .126 .199

N 9190 9277

Preliminary Results

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

Agenda• Intrapreneurial experience contributes to the spreading of theknowledge base, networking capacity of individuals and leadershipskills, which ultimately reinforce individuals’ self-confidence andconviction needed to start up a firm.

• Our preliminary result could complements other findingshighlighting the relevance of work experience on firm creation andintra-venturing (Bates 1990; Bosma et al. 2004; Davidsson and Honig2003).

• The experience gained by being employed by organization withintrapreneurial practices may be useful for an individual willing tostart up a independent venturing

Research Motivations

Theoretical approaches

Methodology

Conclusions

Future research

Preliminary results

Agenda Our limitations…… new research opportunities

• Spanish context… will allow explore it in other countries

• We used cross-section data. Longitudinal data will allow us tocapture the dynamic dimension of this phenomenon.

•A natural extension of our work could be to test the effect ofindividuals’ intrapreneurial experience on the actual growthpattern (high-growth orientation) of new firms.

• Another research avenue would be to examine the role playedby the parent firm. (….How corporate entrepreneurship ismanaged to optimize the performance of a portfolio of spin-offs?…..)

Many thanks for your attention!

Maribel Guerrero, Iñaki PeñaOrkestra-Basque Institute of Competitiveness. Deusto Business School.