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Employee Spinoffs and Other Entrants: Stylized Facts from Brazil

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  • Oana Hirakawa
  • Marc-Andreas Muendler
  • James E. Rauch

Abstract

Using a comprehensive linked employer-employee database from Brazil for the period 1995-2001, we are able for the first time to compare firms founded as employee spinoffs to new firms without parents and to diversification ventures of existing firms entering a new industry. Employee spinoffs are defined either as the director/manager having moved from a parent in the same industry or as one-quarter of the employees having shifted from a common parent. Depending on definition, employee spinoffs account for between one-sixth and one-third of the new firms in Brazil’s private sector during this period. Regardless of definition, size at entry is larger for employee spinoffs than for new firms without parents but smaller than for diversification ventures of existing firms. Similarly, exit rates for employee spinoffs are less than for new firms without parents and comparable to those for diversification ventures of existing firms. These results suggest that we can think of some part of a firm’s productivity draw in the Jovanovic (1982) model as embodied in the firm’s employees and portable by them to a new firm.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15638.

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Date of creation: Jan 2010
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Publication status: published as Marc Muendler, James E. Rauch, and Oana Tocoian,"Employee Spinoffs and Other Entrants: Stylized Facts from Brazil," International Journal of Industrial Organization 30 (September 2012): 447-458.
Handle: RePEc:nbr:nberwo:15638

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Citations

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Cited by:
  1. H. Fryges & M. Wright, 2013. "The origin of spin-offs – A typology of corporate and academic spin-offs," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium, Ghent University, Faculty of Economics and Business Administration 13/864, Ghent University, Faculty of Economics and Business Administration.
  2. Andersson, Martin & Klepper, Steven, 2012. "Characteristics and Performance of New Firms and Spinoffs in Sweden," Working Paper Series, Research Institute of Industrial Economics 902, Research Institute of Industrial Economics.
  3. Oana Hirakawa & Marc-Andreas Muendler & James E. Rauch, 2010. "Employee spinoffs and other entrants: stylized facts from Brazil," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 36384, London School of Economics and Political Science, LSE Library.
  4. Fackler, Daniel & Schnabel, Claus, 2013. "Survival of Spinoffs and Other Startups: First Evidence for the Private Sector in Germany, 1976-2008," IZA Discussion Papers 7542, Institute for the Study of Labor (IZA).
  5. James E. Rauch, 2013. "Employee Spinouts, Social Networks, and Family Firms," NBER Working Papers 19727, National Bureau of Economic Research, Inc.
  6. Douglas L. Campbell, 2010. "History, Culture, and Trade: A Dynamic Gravity Approach," EERI Research Paper Series EERI_RP_2010_26, Economics and Econometrics Research Institute (EERI), Brussels.
  7. Vivarelli, Marco, 2012. "Entrepreneurship in Advanced and Developing Countries: A Microeconomic Perspective," IZA Discussion Papers 6513, Institute for the Study of Labor (IZA).
  8. Marco Vivarelli, 2012. "Entrepreneurship and Post-Entry Performance: the Microeconomic Evidence," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) dises1286, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  9. Avsar, Veysel, 2013. "Antidumping, retaliation threats, and export prices," Policy Research Working Paper Series 6313, The World Bank.
  10. Vivarelli, Marco, 2012. "Drivers of entrepreneurship and post-entry performance : microeconomic evidence from advanced and developing countries," Policy Research Working Paper Series 6245, The World Bank.
  11. Veysel Avsar, 2010. "The Anatomy of Trade Deflection," Working Papers, Florida International University, Department of Economics 1004, Florida International University, Department of Economics.
  12. Fryges, Helmut & Müller, Bettina & Niefert, Michaela, 2013. "Job machine, think tank, or both: What makes corporate spinoffs different?," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 13-093, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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