Corporate development and entrepreneurship: Three essays on start-up evolution, decision making and performance

In a series of three essays, this dissertation applies empirical and simulation methods to investigate the phenomenon of alliance relationships, with the goal of understanding how corporate development strategies shape the evolution, decision making and performance of technology-based start-ups. Two theoretical themes emerge from this work: first, portfolios of choices matter; second, interdependence across activities and time plays an important role in start-up corporate strategy considerations. The first essay uses a portfolio-level lens to understand how the benefits accruing to a start-up from a portfolio of alliances are influenced by the alliance portfolio structure of the start-up's affiliated incumbents. This essay shows that congestion of incumbent resources due to the incumbent partner engaging in multiple similar relationships can reduce the innovation output of the focal start-up; thus, examining the particular configuration of activities a partner is pursuing within their portfolio of relationships offers an important set of insights that can complement networks-based views. The second and third essays focus on mode choice for alliance governance. The second essay empirically examines the determinants of firm portfolio-level choices in this regard, showing that portfolio-level considerations can yield insights missed by taking a purely transaction-level approach: governance capabilities developed over time, along with the firm-level appropriation environment are critical determinants of mode choice. In addition, investments in the development of governance capabilities can have firm valuation consequences. The third essay then focuses more directly on understanding how firm performance is shaped by mode choice. Focusing on the joint role of inter-firm interdependence, governance mode and firm capabilities, this study shows that coordination and exploration are core underlying mechanisms driving firm performance. Coordination and exploration needs arise from the nature of inter-firm interdependence, while coordination and exploration supply arise from the selected governance mode and firm capabilities. Firm performance increases when coordination and exploration needs are matched with coordination and exploration supplied.