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.

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