Abstract
Innovative products and services are the inspiration for many startups. However, founders find that the management of existing operations competes with the attention that they can devote to innovation. We investigate whether and how establishing a middle management level frees up attention for innovation when firms are newly started. We argue that middle management is positively related to introducing product innovations and that the effect is stronger when founders have larger stocks of pre-existing knowledge and when the startup's industry provides more innovation opportunities. These hypotheses are supported by an analysis of 2,431 German high-tech startups founded between 2005 and 2012.
Grimpe, Christoph