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臺大管理論叢
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3. Propositions
Prior studies have suggested that managers contribute two types of capabilities that
constitute firms’ managerial capabilities and are particularly crucial to the economic rent
generated by firms. The first is managers’ industry capabilities, an essential type of human
capital for managers that refers to the managerial skills and knowledge of the industry gained
through industry experience rather than education (Castanias and Helfat, 2001; Kor, 2003;
Kor and Leblebici, 2005). Managers obtain industry skills and knowledge through on-the-job
training or learning within industry settings (Becker, 1964; Pennings, Lee, and Van
Witteloostuijn, 1998; Van Den Bosch and Van Wijk, 2003; Castanias and Helfat, 2001; Adner
and Helfat, 2003; Kor and Leblebici, 2005). These capabilities offer competitive advantages
to firms because they are tacit, difficult to replicate (Castanias and Helfat, 2001), and
contribute to effective management (Mintzberg, 1973). Because every industry has unique
characteristics, capabilities developed in one industry might not be entirely transferable to
others (Castanias and Helfat, 2001). Industry capabilities are further divided into intra- and
extra-industry capabilities depending on whether the capabilities are accumulated within or
outside the focal industry.
3.1 Intra-industry Capabilities
Intra-industry experience has been suggested as enabling managers to accumulate
managerial and industrial skills and knowledge regarding customer needs, technological
potential, and creating and serving markets in the focal industry. Empirical studies have
reported that firms at which top managers or founders have intra-industry experience
perform more competitively. For instance, the intra-industry work experience of managers is
positively associated with firms’ likelihood of survival in the accounting and legal services
industries (Pennings et al., 1998; Kor and Leblebici, 2005). Similarly, findings from the disk-
drive industry reveal that the survival rate of employee spin-outs are positively related to the
capabilities of their founders’ former employers within the same industry because of the ties
and resources that founders inherited from their former employers (Agarwal, Echambadi,
Franco, and Sarkar, 2004). Accordingly, the first proposition of this paper is as follows:
Proposition 1: Increases in the intra-industry capabilities of managers increase an
entrant’s intra-industry performance.