This paper proposes a theory of how employee-driven innovations are developed. An employee with private information about the value of his idea can create a spin-out, work in a division of the parent firm, or work for a spinoff of the parent firm. Developing an idea in a spinoff allows the...

Recent studies on new-idea generation and development have highlighted the role played by network structure in the genesis of new combinations or the process of selecting ideas. However, less attention has been paid to the factors that entice actors to shape social networks during the process of...