The Role of New Firms for the Development of Clusters
AbstractNew firms play an important role for the emergence and development of clusters. In recent years only a few studies have analyzed the (inter)relationship between entrepreneurship and clusters, but most of them have not taken into account the different development-stages of clusters. In accordance with the concept of industry life cycles the evolution of clusters can be seen as a series of several phases. In the first phase new firms build the critical mass for the emergence of a cluster. A growing cluster is characterized by an increase in employment due to the growth of existing firms and a rising number of new firms. In a self-sustaining cluster the number of start-ups corresponds with the number of closures. In contrast, clusters while declining experience a decrease in the number of new firms. The objective of this paper is to analyze the direct effects of new firms on the evolution of clusters. In the first part of my paper I will give an insight into different theoretical frameworks which discuss the role of entrepreneurship for the evolution of clusters. The second part of the paper shows the results of an empirical analysis about the relevance of newly founded firms for the economic development of clusters considering their different development stages. The â€˜Establishment Fileâ€™ of the German Social Insurance Statistics is used as data source for the number of firm foundings and closures and for the survival rates of young firms in Germany. This data source provides longitudinal data about the number of employees in firms. Thus, it is possible to study the employment growth of new firms. This paper compares entrepreneurial activity of industry clusters over the period 1983/84 to 2001/02. Firstly, intra-industry comparisons are performed for several regional clusters of the media, machinery, automotive and textile industry in West Germany as examples of different stages. In a second step, I contrast the aggregate results for the different industries. Finally I analyze the employment effects of start-up cohorts on the evolution of regional clusters in Germany.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Regional Science Association in its series ERSA conference papers with number ersa06p275.
Date of creation: Aug 2006
Date of revision:
Contact details of provider:
Postal: Welthandelsplatz 1, 1020 Vienna, Austria
Web page: http://www.ersa.org
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-14 (All new papers)
- NEP-ENT-2007-01-14 (Entrepreneurship)
- NEP-GEO-2007-01-14 (Economic Geography)
- NEP-TID-2007-01-14 (Technology & Industrial Dynamics)
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.:
- Dubini, Paola, 1989. "The influence of motivations and environment on business start-ups: Some hints for public policies," Journal of Business Venturing, Elsevier, vol. 4(1), pages 11-26, January.
- 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.
- Brixy, Udo & Grotz, Reinhold, 2006. "Regional patterns and determinants of new firm formation and survival in western Germany," IAB Discussion Paper 200605, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
- Fritsch, Michael & Mueller, Pamela & Weyh, Antje, 2004.
"Direct and indirect effects of new business formation on regional employment,"
Freiberg Working Papers
2004,10, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
- Michael Fritsch & Pamela Mueller & Antje Weyh, 2005. "Direct and indirect effects of new business formation on regional employment," Applied Economics Letters, Taylor & Francis Journals, vol. 12(9), pages 545-548.
- Westlund, Hans & Bolton, Roger, 2003. " Local Social Capital and Entrepreneurship," Small Business Economics, Springer, vol. 21(2), pages 77-113, September.
- Jan G. Lambooy & Ron Boschma, 1998.
"Evolutionary economics and regional policy,"
ERSA conference papers
ersa98p489, European Regional Science Association.
- Disney, Richard F & Haskel, Jonathan & Heden, Ylva, 2000.
"Restructuring And Productivity Growth In UK Manufacturing,"
CEPR Discussion Papers
2463, C.E.P.R. Discussion Papers.
- Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Restructuring and productivity growth in uk manufacturing," Economic Journal, Royal Economic Society, vol. 113(489), pages 666-694, 07.
- Ron Martin & Peter Sunley, 2003.
"Deconstructing clusters: chaotic concept or policy panacea?,"
Journal of Economic Geography,
Oxford University Press, vol. 3(1), pages 5-35, January.
- Ron Martin & Peter Sunley, 2002. "Deconstructing Clusters: Chaotic Concept or Policy Panacea," ESRC Centre for Business Research - Working Papers wp244, ESRC Centre for Business Research.
- Zoltan Acs & David Storey, 2004. "Introduction: Entrepreneurship and Economic Development," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 871-877.
- Steven Klepper, 2002. "The capabilities of new firms and the evolution of the US automobile industry," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 645-666, August.
- Hector Rocha & Rolf Sternberg, 2005. "Entrepreneurship: The Role of Clusters Theoretical Perspectives and Empirical Evidence from Germany," Small Business Economics, Springer, vol. 24(3), pages 267-292, 02.
- Michael S. Dahl & Christian Ø.R. Pedersen & Bent Dalum, 2005. "Entrepreneurial Founder Effects in the Growth of Regional Clusters How Early Success is a Key Determinant," DRUID Working Papers 05-18, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Elizabeth Garnsey & Paul Heffernan, 2005. "High-technology clustering through spin-out and attraction: The Cambridge case," Regional Studies, Taylor & Francis Journals, vol. 39(8), pages 1127-1144.
- Michael Fritsch & Pamela Mueller, 2004. "Effects of New Business Formation on Regional Development over Time," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 961-975.
- Rolf Sternberg & Timo Litzenberger, 2004. "Regional clusters in Germany--their geography and their relevance for entrepreneurial activities," European Planning Studies, Taylor & Francis Journals, vol. 12(6), pages 767-791, September.
- Michael S. Dahl & Christian Ø.R. Pedersen & Bent Dalum, 2003. "Entry by Spinoff in a High-tech Cluster," DRUID Working Papers 03-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Guido Buenstorf & Steven Klepper, 2009.
"Heritage and Agglomeration: The Akron Tyre Cluster Revisited,"
Royal Economic Society, vol. 119(537), pages 705-733, 04.
- Guido Buenstorf & Steven Klepper, 2005. "Heritage and Agglomeration: The Akron Tire Cluster Revisited," Papers on Economics and Evolution 2005-08, Max Planck Institute of Economics, Evolutionary Economics Group.
- Fritsch, Michael, 2003. "Zum Zusammenhang zwischen Gründungen und regionaler Entwicklung," Freiberg Working Papers 2003,04, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier).
If references are entirely missing, you can add them using this form.