Investor Exits, Innovation, and Entrepreneurial Firm Growth: Questions for Research: Summary of a Workshop (2009)
Chapter: 4 What Research Merits Consideration?
4
What Research Merits Consideration?
Notwithstanding these challenges, many workshop participants suggested topics that merited further exploration and proposed varied lines of inquiry:
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A survey of entrepreneurs and investors could help quantify and rank factors—securities regulation, legal liability, etc.—raising the transaction and opportunity costs of undertaking an IPO and sustaining a small new public company.
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An international comparison of IPO markets would shed light on issues of competitiveness in high technology sectors, including the extent to which disruptive new entrants are being grown abroad.
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A cross-sectoral comparison of how technological progress and market conditions interact to influence exit strategies, firm formation, and growth more generally.
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More research is needed on what types of innovation are associated with different firm organizational structures and investment sources. In particular, examining different patterns of acquisition could improve understanding of how parent companies sustain or stifle certain kinds of innovative activity. Likewise, studies of differences in firms’ post-exit performance could shed light on the process of creative destruction and its impact on growth.
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The workshop did not give sufficient attention to the question of whether acquisitions were occurring earlier than previously in the life of entrepreneurial companies and, if so, what are the possible consequences of “premature” sell-outs?
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Surveys and perhaps other methods could illuminate how investors’ expectations regarding their eventual exit affect the focus and development of entrepreneurial firms in different sectors.
Finally, it was suggested that any serious effort to investigate the questions raised in the workshop involve a wider range of scholars including historians of markets and entrepreneurship, technology specialists, and students of social networks that influence firm origins, development, and strategies.
