Entrepreneurial Spawning and Firm Characteristics

We analyze the implications of entrepreneurial spawning for a variety of firm characteristicssuch as size, focus, profitability, and innovativeness. We examine the dynamics of spawning overtime. Our model accounts for much of the empirical evidence relating to the relation betweenspawning and firm characteristics. Firms that have higher patent quality spawn more, as dofirms that have higher knowhow. Older firms spawn less, they are more diversified and lessprofitable. Spawning frequency, focus, and profitability are positively related where spawningis driven by the value of organizational fit; they are negatively related with firm size.[...]