Niche leaders are firms distinguished by their dominant market share and superior innovation capabilities within their specific markets. Extant literature suggests that corporate spin-offs are more likely to develop into niche leaders in submarkets of their parent companies because of the resources inherited from parents, but the specific paths to become niche leaders are still unclear. In this paper, we systematically analyze the innovation-driven pathways in which corporate spin-offs become niche leaders. These pathways are generated through investigating the conjoint effects of attibutes from three dimensions: Spin-offs, Parents, and Innovation Network. Utilizing a fuzzy set qualitative comparative analysis (fsQCA) method, the study examines the development paths of 53 corporate spin-offs in China and finds five pathways for them to become niche leaders, namely, parent-supported innovation, parent-led innovation, self-driven innovation with parent halo, self-driven innovation with parent assistance, and multi-agents collaborative innovation. Additionally, it highlights four pathways that lead to failure. Our study unpacks the conjunctive and asymmetric causality underlying the corporate spin-offs’ paths to niche leaders, and provides key insights in the dyadic relations between corporate spin-offs and their parent companies.
