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Networks, geography and the survival of the firm

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  • Mark J. O. Bagley

    (University of Gothenburg
    Jönköping University
    Lund University)

Abstract

Prior studies show that the success of firms in industrial clusters is the result of two main reasons; the transfer of knowledge and routines from parent firms to spinoffs that locate in the same locality, and the returns from co-location of firms. While previous research has largely inferred the presence of parent-spinoff networks, few studies have measured them. Furthermore, the lack of geographic precision has led to conflicting results for evidence of returns from location, as the gains from geographic proximity may not always be linear. This paper introduces network measurement and a refined geographic measure to separate these two respective channels of knowledge transfer, and analyzes their impact on firm survival (as a proxy for firm success). It is found that the gains with respect to location are nonlinear. Furthermore, a firm’s historical links formed through parent-spinoff linkages have a significant impact on survival, which differ depending on the motivations of the entrepreneur. Moreover, these channels of knowledge are complementary in nature.

Suggested Citation

  • Mark J. O. Bagley, 2019. "Networks, geography and the survival of the firm," Journal of Evolutionary Economics, Springer, vol. 29(4), pages 1173-1209, September.
  • Handle: RePEc:spr:joevec:v:29:y:2019:i:4:d:10.1007_s00191-019-00616-z
    DOI: 10.1007/s00191-019-00616-z
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    More about this item

    Keywords

    Industrial clusters; Spinoffs; Networks; Knowledge flows; Firm survival; Schumpeter;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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