Multiple principal conflicts and technological innovation performances of international new ventures: Moderating role of founder's experiences

Abstract

To examine technological innovation performances of international new ventures (INVs), this study investigates how and under what conditions insider and institutional ownership might matter. Building on the perspective of multiple principal conflicts, we theoretically and empirically address this central question by developing an understanding of how insider and institutional ownership could improve and hinder technological innovation performances of INVs. We also examine the influence of INV founding entrepreneurs’ experience to determine whether their prior professional and startup-founding experience could constrain or enhance innovation performance implications of insider and institutional ownership. Empirical results obtained from a sample of 219 Korean INVs demonstrate that insider ownership and institutional ownership can differentially affect INVs’ technological innovation performances by providing positive and negative innovation contributions, respectively. We also found that founders’ prior experience was an important aspect of enhancing the technological innovation of INVs. Specifically, prior professional experience and startup-founding experience of INVs’ founders were found to negatively and positively affect the contribution of institutional ownership to technological innovation performances of INVs, respectively. By contrast, we discovered that the contribution of INVs’ insider ownership to technological innovation performances of INVs had no relationship with their founders’ experience. We ultimately draw meaningful contributions to the literature by examining roles of corporate governance structure of INVs and their founders’ experience in explaining innovation performances of INVs.