Organizational Sponsorship and Founding Environments: A Contingency View on the Survival of Business-Incubated Firms, 1994–2007

Abstract

Organizational sponsorship mediates the relationship between new organizations and their environments by creating a resource-munificent context intended to increase survival rates among those new organizations. Existing theories are prone to treat such resource munificence as the inverse of resource dependence, indicating that the application of new resources in an entrepreneurial context should always benefit new firms. These existing theories, however, often overlook heterogeneity in both types of applied resources as well as founding environmental conditions. By attending to these nuances, we reveal that resource munificence is not necessarily predictive of organizational survival. We find that resource munificence related to sponsorship can potentially decrease or increase survival rates among new organizations and that these effects are contingent on fit of resource type with its respective geographic-based founding density. These findings confirm the need for a more-nuanced theory of sponsorship that attends to the mechanisms and conditions by which resource munificence is likely to alter new organization survival rates.

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