Effects of internal and external factors on business performance of start-ups in South Korea: The engine of new market dynamics

Abstract

This study explored the effects of the innovation system of start-ups and community support and resources on business performance of start-up companies using a survey of 213 start-ups across the different industry sectors in South Korea. In this article, we adopt the partial least square of structural equation model for analyzing the structural relationships of venture creation activities. First, the findings show that both the local community support and external partnership have significant impacts on the social norms and performance-based culture, but the path coefficient of local community support is somewhat greater than external partnership. Second, the test results also indicate that discovery and exploitation, which can be recognized as the major factors of innovation system in the start-up companies, are highly associated with their dynamic capabilities. Moreover, the dynamic capabilities can be also affected by the social norms and performance-based culture due to the paradigm of open innovation. Third, with regard to the total effect, the combination of discovery and local community support plays a central role for improving business performance of start-ups amid a rapidly changing market and economic environment.

Entrepreneurial finance and new venture success ‐ the moderating role of government support

“…The success of ventures can be enhanced through a different source of finance, but government financial support has a noteworthy role in such situations (Xiang & Worthington, 2017). Moreover, the findings are consistent with Chang, Jack, and Webster (2017) (Seo & Lee, 2019), consistent with Quan, Wu, Li, and Ying (2018) who displayed that GS is a significant mechanism for the improvement of business performance. To summarize, our findings strongly related to Park et al (2019) who claimed that public finance does not properly improve venture performance unless the government provides nonfinancial support to the business industry.…”

“…Moreover, the findings are consistent with Chang, Jack, and Webster (2017) who scrutinized that GS facilitates firms regarding access to various resources required for their operation. Ventures in the initial stage face a shortage of resources; GS in this situation is considered vital for newly born ventures (Seo & Lee, 2019), consistent with Quan, Wu, Li, and Ying (2018) who displayed that GS is a significant mechanism for the improvement of business performance. To summarize, our findings strongly related to Park et al (2019) who claimed that public finance does not properly improve venture performance unless the government provides nonfinancial support to the business industry.…”

Research on the Influential Indicators and Measurements of Mediating and Moderating Roles on the Performance of SMEs by Industrial Sectors

“…As an independent variable, corporate competencies on SMEs' success and performance were studied [17]. The dynamic competencies have a positive impact on the business performance of startups was stated [18]. A practical research on the effect of technology commercialization competency on performance, technological competency, and marketing competency as a moderating variable were studied [19].…”

The influence of dynamic capabilities on startup growth

“…The dynamic capability view has gained prominence in relation to understanding service innovation-based competitive advantage (Hogan, Soutar, McColl-Kennedy, & Sweeney, 2011;Tuzovic et al, 2018), notably in innovative organizations such as startups or new technology-based firms (NTBFs) (Seo & Lee, 2019). These firms strive to build scalable, repeatable and profitable business models, one of the reasons they tend to be more fluid (Blank & Dorf, 2012).…”