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The Impact of Functional Integration and Spatial Proximity on the Post-entry Performance of Knowledge Intensive Business Service Firms

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Author Info
Harald Strotmann ()
Andreas Koch ()

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Abstract

Knowledge intensive business service firms (KIBS) are an important element of modern economies and thus attracting increasing interest in scientific research. In the existing literature it is argued that due to the important role of knowledge, innovation and userproducer interaction in the KIBS sector, functional integration and spatial proximity are particularly decisive for a firm’s development. Nevertheless, due to the absence of suitable micro data there is a lack of studies empirically analysing the impact of functional integration and regional proximity using micro firm data. Based upon newlyconducted firm micro data in three German metropolitan regions, this paper supplements the literature by giving a multivariate empirical analysis of the determinants of post-entry performance of KIBS. The results of the estimation of firm growth equations show that functional linkages to knowledge providers, customers and co-operation partners indeed matter for the performance of young KIBS. Regarding spatial proximity, however, especially a high diversification of geographical reach is proved to be crucial.

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File URL: http://www.iaw.edu/RePEc/iaw/pdf/iaw_dp_18.pdf
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Publisher Info
Paper provided by Institut für Angewandte Wirtschaftsforschung (IAW) in its series IAW Discussion Papers with number 18.

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Length: 36 pages
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:iaw:iawdip:18

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Related research
Keywords: Employment growth; Entrepreneurship; Entry; Firm growth; Innovation; Knowledge intensive business services; Post-entry performance;

Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
L80 - Industrial Organization - - Industry Studies: Services - - - General
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

References listed on IDEAS
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    Other versions:
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    Other versions:
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  10. D.B. Audretsch & Luuk Klomp & A.R. Thurik, 1998. "Do Services differ from Manufacturing? The Post-Entry Performance of Firms in Dutch Services," Tinbergen Institute Discussion Papers 98-012/3, Tinbergen Institute. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Andreas Koch & Jochen Spaeth, 2009. "New Firms---Different Jobs? An Inquiry into the Quality of Employment in Start-ups and Incumbents," IAW Discussion Papers 50, Institut für Angewandte Wirtschaftsforschung (IAW). [Downloadable!]
  2. Harald Strotmann & Andreas Koch, 2005. "Determinants of Innovative Activity in Newly Founded Knowledge Intensive Business Service Firms," IAW Discussion Papers 21, Institut für Angewandte Wirtschaftsforschung (IAW). [Downloadable!]
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