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

While pre-entry experience is widely regarded as a critical asset that positively relates to new entrant performance, empirical support is mixed. To address this inconsistency, we meta-analyze the empirical findings in 272 papers that examine the performance implications of pre-entry experience. We draw theoretically on the organizational learning literature to argue that the relationship between pre-entry experience and new entrant performance will be contingent on the characteristics (i.e., levels and types) 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 performance of 0.07, and a partial correlation of 0.06. Meanwhile, the failure rates of spin-outs and de alio entrants are 11% lower than that of de novo entrants. The moderating analysis results show that the correlation of pre-entry experience and economic performance is lower in knowledge or technology intensive (KTI) industries, but higher in manufacturing and service industries that are low KTI. The correlation is also higher in institutions 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 relationship between pre-entry experience and new entrant performance.