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Entry by Spinoff in a High-tech Cluster

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Author Info

  • Michael S. Dahl
  • Christian Ø.R. Pedersen
  • Bent Dalum

Abstract

Recently empirical studies have focused on how capabilities of new entering firms are important for the evolution of industries over time. The performance of new entrants appears to be significantly influenced by their pre-entry background. The general impression of the literature is that firms founded by former employees of successful incumbents have shown larger propensities to survive than other categories of new entrants. In the present paper, we use this approach to study the emergence and growth over the past three decades of a wireless telecommunications cluster around Aalborg in North Jutland, Denmark (NorCOM). The aim is to analyse the dominating forces behind the growth of NorCOM using detailed information about the founding events and organizational background of the individual entrants in the cluster. We show that the technological successes of firms in the region have powered a spinoff process, which can account for the majority of the growth in number of firms and employment in the cluster.

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File URL: http://www3.druid.dk/wp/20030011.pdf
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Bibliographic Info

Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 03-11.

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Date of creation: 2003
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Handle: RePEc:aal:abbswp:03-11

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Web page: http://www.druid.dk/

Related research

Keywords: Clusters; Spinoffs; Evolution of Industries; Entrepreneurs;

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References

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  1. Arthur, W. Brian, 1990. "'Silicon Valley' locational clusters: when do increasing returns imply monopoly?," Mathematical Social Sciences, Elsevier, vol. 19(3), pages 235-251, June.
  2. Mark Lorenzen & Volker Mahnke, 2002. "Global Strategy and the Acquisition of Local Knowledge How MNCs Enter Regional Knowledge Clusters," DRUID Working Papers 02-08, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  3. Bent Dalum, 1995. "Local and global linkages the radiocommunications cluster in Northern Denmark," Industry & Innovation, Taylor and Francis Journals, vol. 2(2), pages 89-109.
  4. Constance E. Helfat & Marvin B. Lieberman, 2002. "The birth of capabilities: market entry and the importance of pre-history," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 725-760, August.
  5. April Mitchell Franco & Darren Filson, 2000. "Knowledge Diffusion through Employee Mobility," Claremont Colleges Working Papers 2000-61, Claremont Colleges.
  6. S. Klepper & S. Sleeper, 2002. "Entry by Spinoffs," Papers on Economics and Evolution 2002-07, Max Planck Institute of Economics, Evolutionary Economics Group.
  7. Raghuram G. Rajan & Luigi Zingales, 2001. "The Firm As A Dedicated Hierarchy: A Theory Of The Origins And Growth Of Firms," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 805-851, August.
  8. von Hippel, Eric, 1987. "Cooperation between rivals: Informal know-how trading," Research Policy, Elsevier, vol. 16(6), pages 291-302, December.
  9. Olav Sorenson, 2003. "Social networks and industrial geography," Journal of Evolutionary Economics, Springer, vol. 13(5), pages 513-527, December.
  10. Steven Klepper & Kenneth L. Simons, 2000. "The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 728-760, August.
  11. Andrew A. King & Christopher L. Tucci, 2002. "Incumbent Entry into New Market Niches: The Role of Experience and Managerial Choice in the Creation of Dynamic Capabilities," Management Science, INFORMS, vol. 48(2), pages 171-186, February.
  12. Anton, James J & Yao, Dennis A, 1995. "Start-ups, Spin-offs, and Internal Projects," Journal of Law, Economics and Organization, Oxford University Press, vol. 11(2), pages 362-78, October.
  13. Cooper, Arnold C., 1985. "The role of incubator organizations in the founding of growth-oriented firms," Journal of Business Venturing, Elsevier, vol. 1(1), pages 75-86.
  14. Fox, Craig R & Tversky, Amos, 1995. "Ambiguity Aversion and Comparative Ignorance," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 585-603, August.
  15. Klepper, Steven, 2001. "Employee Startups in High-Tech Industries," Industrial and Corporate Change, Oxford University Press, vol. 10(3), pages 639-74, September.
  16. Bent Dalum & Christian Ø.R. Pedersen & Gert Villumsen, 2002. "Technoligical Life Cycles Regional Clusters Facing Disruption," DRUID Working Papers 02-10, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
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Citations

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Cited by:
  1. Ron A. Boschma & Rik Wenting, 2004. "The spatial evolution of the British automobile industry," Papers in Evolutionary Economic Geography (PEEG) 0504, Utrecht University, Section of Economic Geography, revised Aug 2004.
  2. Guido Buenstorf & Dirk Fornahl, 2006. "B2C - Bubble to Cluster: The Dot.com Boom, Spin-off Entrepreneurship, and Regional Industry Evolution," Papers on Economics and Evolution 2006-20, Max Planck Institute of Economics, Evolutionary Economics Group.
  3. Guido Buenstorf & Michael Fritsch & Luis Medrano, 2010. "Regional Knowledge and the Emergence of an Industry: Laser Systems Production in West Germany, 1975Ð2005," Papers in Evolutionary Economic Geography (PEEG) 1016, Utrecht University, Section of Economic Geography, revised Nov 2010.
  4. Ron A. Boschma & Anet B.R. Weterings, 2005. "The effect of regional differences on the performance of software firms in the Netherlands," Journal of Economic Geography, Oxford University Press, vol. 5(5), pages 567-588, October.
  5. Mueller, Pamela, 2005. "Exploring the knowledge filter: how entrepreneurship and university-industry relations drive economic growth," Freiberg Working Papers 2005,17, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
  6. Anne Otto, 2006. "The Role of New Firms for the Development of Clusters," ERSA conference papers ersa06p275, European Regional Science Association.
  7. Mueller, Pamela, 2006. "Exploring the knowledge filter: How entrepreneurship and university-industry relationships drive economic growth," Research Policy, Elsevier, vol. 35(10), pages 1499-1508, December.
  8. Wennberg, Karl, 2008. "Knowledge combinations and the survival of financial services ventures," Working Paper Series in Business Administration 2008:1, Stockholm School of Economics.
  9. Mario A. Maggioni, 2004. "The rise and fall of industrial clusters: Technology and the life cycle of region," Working Papers 2004/6, Institut d'Economia de Barcelona (IEB).
  10. Eriksson, Tor & Moritz Kuhn, Johan, 2006. "Firm spin-offs in Denmark 1981-2000 -- patterns of entry and exit," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 1021-1040, September.
  11. Weterings, Anet & Koster, Sierdjan, 2007. "Inheriting knowledge and sustaining relationships: What stimulates the innovative performance of small software firms in the Netherlands?," Research Policy, Elsevier, vol. 36(3), pages 320-335, April.
  12. Matthias Brachert & Christoph Hornych, 2011. "Entrepreneurial Opportunity and the Formation of the Photovoltaic Industry in Eastern Germany," ERSA conference papers ersa10p1460, European Regional Science Association.
  13. Guido Buenstorf & Dirk Fornahl, 2009. "B2C—bubble to cluster: the dot-com boom, spin-off entrepreneurship, and regional agglomeration," Journal of Evolutionary Economics, Springer, vol. 19(3), pages 349-378, June.
  14. Leo van Grunsven, 2006. "New Industries in Southeast Asia’s Late Industrialization: Evolution versus Creation - The Automation Industry in Penang (Malaysia) considered," Papers in Evolutionary Economic Geography (PEEG) 0611, Utrecht University, Section of Economic Geography, revised Dec 2006.
  15. Ron Boschma & Rik Wenting, 2011. "The spatial clustering of the Dutch banking sector in the Amsterdam region: the importance of spinoffs and mergers in the period 1850-1993," ERSA conference papers ersa10p1158, European Regional Science Association.
  16. Luca Colombo & Herbert Dawid, 2008. "Complementary Assets, Start-Ups and Incentives to Innovate," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0080, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

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