Performance Differentials between Diversifying Entrants and Entrepreneurial Start-Ups: A Complexity Approach

We investigate the relationship between firms’entry characteristics and their subsequent performance as contingent on environmental turbulence and stage of industry life cycle by simulating industry as an NKC landscape. Diversifying entrants differ from entrepreneurial start-ups in terms of the complexity of their routines. We posit that diversifying entrants outperform entrepreneurial start-ups when turbulence is high. Further, learning—possible in later industry stages—disproportionately favors entrepreneurial start-ups.

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