The birth of capabilities: market entry and the importance of pre‐history

Abstract

We analyze the birth of capabilities and resources within organizations and within industries, and their historical antecedents, at the time of market entry. We find a consistent theme: the greater the similarity between pre‐entry firm resources and the required resources in an industry, the greater the likelihood that a firm will enter that particular industry, and the greater the likelihood that the firm will survive and prosper. In addition, resource gaps affect the likelihood, speed and mode of entry.