Accumulated knowledge and innovation as antecedents of reputation in new ventures

Abstract

Purpose – The purpose of this paper is to analyse the effect of an entrepreneur’s accumulated knowledge and firm’s innovation on the development of reputation in the early years of a new venture from a knowledge-based approach. Design/methodology/approach – The study proposes a model that is tested with a sample of 130 firms in non-high-tech industries from the Canary Islands (Spain) using structural equation modelling. Data were collected through a survey. Findings – This study provide interesting insights on the effect of reputation on the performance in new ventures, along with antecedents of the new firm’s reputation from the knowledge-based view. The findings confirm that innovation and prior knowledge play important roles in the development of reputation in the early years of a new venture and that reputation has a significant effect on the performance of a new firm. The entrepreneur’s stock of knowledge does not reveal itself as a significant determinant of innovation and knowledge creation in this context. Research limitations/implications – The entrepreneur’s accumulated knowledge should be seen as a valuable existing asset for a new venture, and innovation and knowledge creation can be used to develop core competencies in orientating the strategic direction of a new venture. Both elements become fundamental despite addressing non-high-tech industries. Practical implications – Entrepreneurs should be aware of the key role that the creation and the stock of knowledge play in the first years of company life and this research shows how significant this relationship with the initial reputation and performance of new venture in non-high-technology industries is. Originality/value – There is a relative scarcity of studies on reputation-building strategies in new entrepreneurial ventures, and the present study adopts an original knowledge-based perspective to shed new light on the analysis of reputation.