Who Do Start-Up Firms Imitate? A Study of New Market Entries in the CLEC Industry

Richard J. Gentry, Thomas Dalziel, Mark A. Jamison
2013 Journal of Small Business Management  
Institutional theory contends firms imitate other firms with ideal traits, whereas the strategic groups literature on imitation suggests firms imitate similar firms. We address this debate by studying 1067 market entries by founder managed start-ups in the US Competitive Local Exchange Carrier (CLEC) industry from 1996-2004. In support of the strategic groups literature, start-ups imitate entry decisions of and gravitate toward markets that are densely populated by other start-ups. While
more » ... ps avoid markets already densely populated by corporate ventures, they imitate the market entries of corporate ventures. Our discussion of these and other findings provides insights for start-ups navigating new industries.
doi:10.1111/jsbm.12055 fatcat:h6odqmvcgzejbalzerxvskhk5e