Founder human capital and new technology venture R&D search intensity: the moderating role of an environmental jolt

We argue that founder human capital—formal education, same-industry work experience, and prior entrepreneurial experience—will be positively related to the research and development (R&D) search intensity of new technology ventures. In addition, these positive relationships will be strengthened when new technology ventures face an environmental jolt, such as the Great Recession. An empirical analysis of longitudinal data on new technology ventures in the manufacturing industry from the Kauffman Firm Survey (KFS) broadly supports our hypotheses. The results show that all dimensions of founder human capital increase new technology ventures’ R&D search intensity, and the positive effect of same-industry work experience becomes stronger during the Great Recession. However, in contrast to our expectation, the positive effect of prior entrepreneurial experience is weaker during the Great Recession, not stronger. Furthermore, we do not find support for our hypothesis that the positive relationship between founders’ formal education and new technology ventures’ R&D search intensity is stronger during the Great Recession. These seemly contradictory results suggest that although the different dimensions of founder human capital are all positively related to new technology ventures’ R&D search intensity, they exert divergent impacts on it when confronting an environmental jolt. As such, our study extends the situational and institutional determinants of R&D search intensity by focusing on founders’ human capital and provides deeper insights by considering environmental conditions. By shifting the focus from established firms to new ventures, our study also enriches the understanding of new technology ventures’ innovative activities.