Parent hostility and spin‐out performance

Prior research has focused on the performance implications of positive or neutral parent‐child relationships, but neglected negative, conflict‐laden relationships. This study explores from an embeddedness perspective whether parent hostility (degree to which an incumbent firm disapproves of the spawning of a spin‐out from within its ranks) affects spin‐out performance and how spin‐outs can effectively react to it. Analyses of 144 technology spin‐outs support our arguments that spin‐outs suffer negative consequences from hostility. These are less severe, however, if the spin‐out pursues effective network development .