External Ties of Managers and Firm Performance in an Emerging Industry

Abstract

This paper examines the impact of managerial ties on the performance difference among entrants in an emerging industry. Empirical findings from firms that entered the cellularphone service industry between 1983 and 1998 suggest the following. First, managers’ ties to an intra-industry association positively moderated the relationship between managers’ intraindustry experience and an entrant’s new subscribers at the early stage of the focal industry; however, this effect decreased as the industry aged. Second, managers’ ties to intra-industry competitors positively moderated the relationship between managers’ intra industry experience and an entrant’s new subscribers regardless of industry age. Finally, mangers’ external ties to other firms outside the industry exhibited no moderating impact.