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The Spatial Dynamic Between Established Firms and Entrants

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Author Info
Lawrence A. Plummer
Abstract

The research uses 377 firms that filed initial public offerings from 1990 to 1993 as the basis for existing firms and follows their financial performance from 1990 to 2004. In the first year of a new firm’s existence, before the entrant has time to contribute to positive local effects, its entry is more likely to hurt the financial performance of existing firms. By the third year after entry, however, the effect on the financial performance of existing firms is positive. In the short term, entrants are foes and in the long term, entrants are friends.

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Paper provided by U.S. Small Business Administration, Office of Advocacy in its series The Office of Advocacy Small Business Working Papers with number 07lp.

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Length: 35 pages
Date of creation: 2007
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Handle: RePEc:sba:wpaper:07lp

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(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. Lawrence A. Plummer & Brian Headd, 2008. "Rural and Urban Establishment Births and Deaths Using the U.S. Census Bureau’s Business Information Tracking Series," The Office of Advocacy Small Business Working Papers 08lpbh, U.S. Small Business Administration, Office of Advocacy. [Downloadable!]
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