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The Impact of Virtual Embeddedness on New Venture Survival: Overcoming the Liabilities of Newness

Eric A. Morse¹; Sally W. Fowler²; Thomas B. Lawrence³

¹ Entrepreneurship and Family Enterprise and the Director of the Pierre L. Morrissette Institute for Entrepreneurship at the Richard Ivey School of Business, the University of Western Ontario, in London, Ontario. He received his PhD in Entrepreneurship and Strategic Management from Texas Tech Universi · ² Strategic Management and Kogod Endowed Fellow at the Kogod School of Business, American University, Washington, DC. She received her PhD in strategic management from the University of North Carolina at Chapel Hill. Her research focuses on strategic decision–making processes, the development of strat · ³ CMA Centre for Strategic Change and Performance Measurement, in the Faculty of Business Administration, Simon Fraser University, in Vancouver, British Columbia. He received his PhD in organizational analysis from the University of Alberta. His research examines the dynamics of power, change, and ins

In this article, we examine the impact of virtual embeddedness—the establishment of interorganizational connections through the use of electronic technologies—on the likelihood of new venture survival. We explore the effects of recent technological and social changes on traditional conceptions of the liabilities of newness. We argue that virtual embeddedness positively affects new venture survival by decreasing the liabilities of newness associated with a new venture's need to create and manage new roles and systems, lack of extant trust relationships, lack of social capital, and lack of economic capital. This argument has important implications for both the study and management of contemporary new ventures.

DOI

10.1111/j.1540-6520.2007.00167.x

Volume

31 (2)

Pages

139-159

Language

en

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