Entry Barriers and New Venture Performance: A Comparison of Universal and Contingency Approaches
Department
Management and Entrepreneurship
Document Type
Article
Publication Date
7-2001
Abstract
This study utilized universal and contingency approaches to empirically investigate the effects of entry barriers on new venture performance. Consistent with prior research utilizing the universal approach, this study found only limited support for the direct independent effects of entry barriers on performance. Conversely, this study provides strong support for utilizing the contingency approach to examine the complex effects of entry barriers on divergent performance measures. Overall, contingency models incorporating the theoretically justified moderating effects of industry life cycle stage and venture strategy explained 31, 61, and 45 percent of the variance in profitability, shareholder wealth creation, and sales growth respectively.