Keywords: human capital, top management team, absorptive capacity, venturing strategies, alliances, joint ventures, acquisitions, high technology, venture team, new ventures, technological change, innovation, financial performance
Venture team human capital and absorptive capacity in high technology new ventures
In high technology environments, rapid technological change means that the value of a firm's existing knowledge is quickly eroded. In order to acquire needed capabilities, high technology new ventures engage in venturing strategies such as acquisitions and joint ventures. The top management team is an important source of inherited knowledge for these ventures and therefore influences their absorptive capacity. We hypothesise that high technology new ventures' ability to learn through venturing activities is influenced by their top management teams' human capital. This study analyses the human capital characteristics of the top management teams of 340 high technology new ventures from the USA. It is found that human capital diversity of the top management teams moderates the relationship between venturing activities and innovation and financial performance in these ventures. In contrast, the level of human capital has no effect. The implications for management practice and future research are discussed.