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Spinoffs in Germany: characteristics, survival, and the role of their parents

Author

Listed:
  • Daniel Fackler

    () (Halle Institute for Economic Research)

  • Claus Schnabel

    () (University of Erlangen-Nürnberg, Chair of Labour and Regional Economics)

  • Alexandra Schmucker

    () (Institute for Employment Research)

Abstract

Abstract Using a 50 % sample of all private sector establishments in Germany, we report that spinoffs are larger, initially employ more skilled and more experienced workers, and pay higher wages than other startups. We investigate whether spinoffs are more likely to survive than other startups, and whether spinoff survival depends on the quality and size of their parent companies, as suggested in some of the theoretical and empirical literature. Our estimated survival models confirm that spinoffs are generally less likely to exit than other startups. We also distinguish between pulled spinoffs, where the parent company continues after they are founded, and pushed spinoffs, where the parent company stops operations. Our results indicate that in western and eastern Germany and in all sectors investigated, pulled spinoffs have a higher probability of survival than pushed spinoffs. Concerning the parent connection, we find that intra-industry spinoffs and spinoffs emerging from better-performing or smaller parent companies are generally less likely to exit.

Suggested Citation

  • Daniel Fackler & Claus Schnabel & Alexandra Schmucker, 2016. "Spinoffs in Germany: characteristics, survival, and the role of their parents," Small Business Economics, Springer, vol. 46(1), pages 93-114, January.
  • Handle: RePEc:kap:sbusec:v:46:y:2016:i:1:d:10.1007_s11187-015-9673-x
    DOI: 10.1007/s11187-015-9673-x
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    Keywords

    Spinoffs; Startups; Firm exits; Germany;

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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