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Long-Term Growth Determinants Of Young Businesses In Germany – The Effects Of Regional Concentration And Specialisation

Author

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  • Anne Otto

    (Institute of Employment Research, Germany)

  • Dirk Fronahl

    (BAW Institute for Regional Economics Research, Germany)

Abstract

This paper explores how different levels of regional concentration and specialisation affect the long-term growth of young firms. The sample consists of knowledge-intensive and non-knowledge-intensive West German manufacturing firms which were established in 1992 and managed to survive for 11 years. The paper examines the combined effect of regional, industrial and firm-specific determinants. The analysis of the concentration and specialisation factors takes into account the industrial and technological dimensions and the regional availability of human capital. With regard to the measures of concentration, a location in an industrial or technological agglomeration slightly reduces the growth rate of start-ups. The same negative, but stronger, effect can be observed for measures of competition. Furthermore, our results suggest that start-ups exhibit higher growth rates, the more highly specialised the region is in which they are located.

Suggested Citation

  • Anne Otto & Dirk Fronahl, 2009. "Long-Term Growth Determinants Of Young Businesses In Germany – The Effects Of Regional Concentration And Specialisation," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 3(1), pages 1-35, JUNE.
    • Handle: RePEc:rrs:journl:v:3:y:2009:i:1:p:1-35
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    More about this item

    Keywords

    firm growth; regional concentration; regional specialisation and diversification; GLS model;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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