Organizational sponsorship and the economics of place: How regional urbanization and localization shape incubator outcomes

Alejandro Amezcua (1) , Tiago Ratinho (2) , Lawrence Plummer (3) , Parvathi Jayamohan (4)

1 Whitman School of Management, Syracuse University
2 LEM - Lille économie management - UMR 9221
3 Western University [London, ON, Canada]
4 Salem State University

Organizational sponsorship impacts new venture emergence and survival prospects by shaping the relationship between new ventures and their surrounding environment. While extant literature offers an explanation as to why heterogeneity in the effectiveness of sponsorship emerges based on the sponsor's characteristics, current theorizing largely overlooks how sponsorship interacts with local economic conditions. This study introduces insights from urban economics to extend organizational sponsorship theory by showing how different types of agglomeration economies affect the effectiveness of organizational sponsorship. We test our hypotheses with a comprehensive database that includes over 46,000 sponsored and non-sponsored firms in the years 1997–2007. Our results reveal organizational sponsorship delays new venture exit when urbanization levels are low, localization is low, and both urbanization and localization are high.

Domaines: Sciences de l'Homme et Société; Gestion et management

Alejandro Amezcua, Tiago Ratinho, Lawrence Plummer, Parvathi Jayamohan. Organizational sponsorship and the economics of place: How regional urbanization and localization shape incubator outcomes. Journal of Business Venturing, 2020, 35 (4), pp.105967. ⟨10.1016/j.jbusvent.2019.105967⟩. ⟨hal-02998376⟩