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Spinoff Entry in High-tech Industries: Motives and Consequences

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Author Info

  • Peter Thompson

    ()
    (Department of Economics, Florida International University)

  • Steven Klepper

    (Department of Social and Decision Sciences, Carnegie Mellon University)

Abstract

Various theories have been advanced for why employees leave incumbent firms to found firms in the same industry, which we call spinoffs. We review the accumulating evidence about spinoffs in various high-tech industries, highlighting the central role often played by disagreements. Because existing theories have ignored them, we develop the foundations of a model of spinoff formation driven by disagreements. Doing so proves to be rather challenging, because disagreements are not possible among rational actors that talk to each other. We introduce a minimal degree of non-rationality, based on the concept of solipsism, and ask whether such a concept is capable of generating predictions consistent with the empirical literature.

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File URL: http://casgroup.fiu.edu/pages/docs/2247/1275232247_05-03.pdf
File Function: First version, 2005
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Bibliographic Info

Paper provided by Florida International University, Department of Economics in its series Working Papers with number 0503.

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Length: 36 pages
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:fiu:wpaper:0503

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Phone: (305) 348-2316
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Web page: http://casgroup.fiu.edu/Economics/
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Related research

Keywords: Spinoffs; Technological change; learning; disagreements;

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References

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Citations

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Cited by:
  1. Norbäck, Pehr-Johan & Persson, Lars, 2006. "Entrepreneurial Innovations, Competition and Competition Policy," Working Paper Series 670, Research Institute of Industrial Economics, revised 05 May 2010.
  2. Peter Thompson, 2008. "Desperate Housewives? Communication Difficulties and the Dynamics of Marital (un)Happiness," Economic Journal, Royal Economic Society, vol. 118(532), pages 1640-1669, October.
  3. David Audretsch & Oliver Falck & Stephan Heblich, 2011. "Who’s got the aces up his sleeve? Functional specialization of cities and entrepreneurship," The Annals of Regional Science, Springer, vol. 46(3), pages 621-636, June.
  4. D.B. Audretsch & M.W.J.L. Sanders, 2008. "Globalization and the Rise of the Entrepreneurial Economy," Working Papers 08-21, Utrecht School of Economics.
  5. Daniela Grieco, 2008. "The entrepreneurial decision: theories, determinants and constraints," LIUC Papers in Economics 207, Cattaneo University (LIUC).
  6. Andersson, Martin & Baltzopoulos, Apostolos & Lööf, Hans, 2012. "R&D strategies and entrepreneurial spawning," Research Policy, Elsevier, vol. 41(1), pages 54-68.
  7. Peter Thompson & Margaret M. Byrne, 2005. "Collective Equipoise, Disappointment and the Therapeutic Misconception: On the Consequences of Selection for Clinical Research," Working Papers 0506, Florida International University, Department of Economics.
  8. Baltzopoulos, Apostolos & Braunerhjelm, Pontus & Tikoudis, Ioannis, 2012. "Spin-off: Individual, Firm, Industry and Regional Determinants," Working Paper Series in Economics and Institutions of Innovation 265, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  9. A. Bonaccorsi & S. Giannangeli, 2010. "One or more growth processes? Evidence from new Italian firms," Small Business Economics, Springer, vol. 35(2), pages 137-152, September.
  10. Oliver Falck & Michael Fritsch & Stephan Heblich, 2008. "The Apple doesn't Fall far from the Tree: Location of Start-Ups Relative to Incumbents," CESifo Working Paper Series 2486, CESifo Group Munich.
  11. Sierdjan Koster, 2009. "Taking The First Hurdle In New Firm Formation. The Effects Of Industry-Specific Skills And Support On Survival During The Founding Process," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 3(1), pages 36-62, JUNE.

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