In infant industries, a great share of new market opportunities is depleted by firms that spinoff from incumbents. A model emphasizing the relation between incumbents' evolving corporate cultures and the generation of spinoffs explains this regularity in industry evolution. Organizations reach a...

We offer a theory of spinoffs that explains some salient aspects of these important market entrants. In infant industries, a great share of new market opportunities is depleted by firms that spinoff from incumbents. A model emphasizing the relation between incumbents’ evolving corporate...