In this article, the authors develop and test a theoretical model of the effects of outside directors' human and social capital on firm growth. They posit that outside directors' board memberships and managerial experiences have additive and interactive effects. Using a longitudinal sample of high technology firms, they test their theory and find that outside directors' membership on multiple boards, industry-specific managerial experience, and firm-specific founding experience have strong additive effects on firm growth. They also find negative interaction effects, indicating the costs of acquiring and combining certain types of outside director human and social capital within the board.
This paper develops and tests a model of multilevel experience-based top management team competence and its effects on a firm's capacity of entrepreneurial growth. The model incorporates the individual and additive effects of firm, team, and industry levels of managerial experience and the conflict effects of combining multiple levels of experience. Theoretical arguments are tested in a longitudinal sample of entrepreneurial firms from the medical and surgical instruments industry. The results indicate that founders' participation in the top management team and managers' past experience in the industry contribute to the competence of the team in seizing new growth opportunities. The results also show that, because of conflict effects, the positive effect of founders' participation in the management team on the rate of growth weakens as either the shared team-specific experience or industry-specific managerial experience in the team increases. For practitioners, the most important implication is that for sustained growth, entrepreneurial firms should learn to balance different levels of managerial experience in the top management team. One way to achieve this balance is to retain valuable founder resources in the team while avoiding high levels of shared team-specific experience and industry-specific managerial experience.
To help understand how firms develop and maintain dynamic capabilities, we examine the effects of the dynamics, management, and governance of R&D and marketing resource deployments on firm-level economic performance. In a sample of technology-based entrepreneurial firms, we find that a history of increased investments in marketing is an enduring source of competitive advantage. We also find that managers' firm-specific experience positively moderates the relationship between R&D deployment intensity and economic returns. In addition, institutional ownership boosts economic returns from marketing deployments by subjecting these deployments to increased scrutiny and by sending positive signals to the market about the firm.
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