When Does the Pre-entry Experience of New Entrants Improve Their Performance? A Meta-Analytical Investigation of Critical Moderators

Abstract

Although pre-entry experience is widely regarded as a critical asset that positively influences new entrant performance, empirical support is mixed. To address this inconsistency, we conduct a meta-analysis of the empirical findings in 272 papers. We draw theoretically on the organizational learning literature to argue that the pre-entry experience–new entrant performance relationship is contingent on the characteristics of pre-entry experience, the environmental context of the new entrant, and the interaction between the two. In particular, we examine the effects of two levels of pre-entry experience (firm and founder), four types of founder-level pre-entry experience (entrepreneurial, managerial, industry, and functional experience), and two types of environments (industry and institutional). The meta-analysis results show a significant and positive correlation between founder-level pre-entry experience and economic performance of 0.07. Likewise, the failure rates of spinouts and diversifying entrants are 11% lower than that of start-ups. The moderating analysis results show that the correlation of founder-level pre-entry experience and economic performance is lower in knowledge- or technology-intensive (KTI) industries and higher in low-KTI manufacturing and service industries. The correlation is also higher in institutional environments with high power distance and individualism. These findings provide compelling new evidence for the importance of pre-entry experience and advance our understanding of the boundary conditions on the pre-entry experience–new entrant performance relationship. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1589 .