Market Information Acquisition,Use, and New Venture Performance*

A substantial body of existing research has linked firm performance to the acquisition and use of customer, competitor, and other market information. This paper examines the impact on new venture performance of formal processes for market information collection and use. This study hypothesizes that new venture performance will be an increasing function of both market information and use. Two moderator hypotheses are also tested. In particular, it is expected that the impact of formal market information processes will be greater in market‐driven new ventures than in technology‐driven new ventures. These hypotheses were tested using data collected from 222 Chinese new ventures. The empirical analysis confirms the positive role of formal processes in new venture performance. However, the analysis does not support the moderator hypotheses. This study finds that (1) formal processes for information acquisition are equally important in technology‐driven and market‐driven firms and (2) formal processes for information use have a greater impact on new venture performance in technology‐driven firms than in market‐driven firms.