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Entry by Spinoff in a High-tech Cluster

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  • Michael S. Dahl
  • Christian Ø.R. Pedersen
  • Bent Dalum

Abstract

Recently empirical studies have focused on how capabilities of new entering firms are important for the evolution of industries over time. The performance of new entrants appears to be significantly influenced by their pre-entry background. The general impression of the literature is that firms founded by former employees of successful incumbents have shown larger propensities to survive than other categories of new entrants. In the present paper, we use this approach to study the emergence and growth over the past three decades of a wireless telecommunications cluster around Aalborg in North Jutland, Denmark (NorCOM). The aim is to analyse the dominating forces behind the growth of NorCOM using detailed information about the founding events and organizational background of the individual entrants in the cluster. We show that the technological successes of firms in the region have powered a spinoff process, which can account for the majority of the growth in number of firms and employment in the cluster.

Suggested Citation

  • 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.
  • Handle: RePEc:aal:abbswp:03-11
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    References listed on IDEAS

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    Cited by:

    1. Ron A. Boschma & Rik Wenting, 2004. "The spatial evolution of the British automobile industry," Papers in Evolutionary Economic Geography (PEEG) 0504, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2004.
    2. Guido Buenstorf & Dirk Fornahl, 2006. "B2C - Bubble to Cluster: The Dot.com Boom, Spin-off Entrepreneurship, and Regional Industry Evolution," Papers on Economics and Evolution 2006-20, Philipps University Marburg, Department of Geography.
    3. Guido Bünstorf & Michael Fritsch & Luis F. Medrano, 2010. "Regional Knowledge and the Emergence of an Industry: Laser Systems Production in West Germany, 1975-2005," Jena Economic Research Papers 2010-079, Friedrich-Schiller-University Jena.
    4. Ron A. Boschma & Anet B.R. Weterings, 2005. "The effect of regional differences on the performance of software firms in the Netherlands," Journal of Economic Geography, Oxford University Press, vol. 5(5), pages 567-588, October.
    5. Mueller, Pamela, 2005. "Exploring the knowledge filter: how entrepreneurship and university-industry relations drive economic growth," Freiberg Working Papers 2005,17, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
    6. Anne Otto, 2006. "The Role of New Firms for the Development of Clusters," ERSA conference papers ersa06p275, European Regional Science Association.
    7. Mueller, Pamela, 2006. "Exploring the knowledge filter: How entrepreneurship and university-industry relationships drive economic growth," Research Policy, Elsevier, vol. 35(10), pages 1499-1508, December.
    8. Karl Wennberg, 2009. "Knowledge combinations and the survival of financial services ventures," Journal of Evolutionary Economics, Springer, vol. 19(2), pages 259-276, April.
    9. Mario A. Maggioni, 2004. "The rise and fall of industrial clusters: Technology and the life cycle of region," Working Papers 2004/6, Institut d'Economia de Barcelona (IEB).
    10. Eriksson, Tor & Moritz Kuhn, Johan, 2006. "Firm spin-offs in Denmark 1981-2000 -- patterns of entry and exit," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 1021-1040, September.
    11. Ron Boschma, 2015. "Do spinoff dynamics or agglomeration externalities drive industry clustering? A reappraisal of Steven Klepper’s work," Industrial and Corporate Change, Oxford University Press, vol. 24(4), pages 859-873.
    12. Colombo, Luca & Dawid, Herbert, 2016. "Complementary assets, start-ups and incentives to innovate," International Journal of Industrial Organization, Elsevier, vol. 44(C), pages 177-190.
    13. Anders Malmberg & Peter Maskell, 2010. "An Evolutionary Approach to Localized Learning and Spatial Clustering," Chapters,in: The Handbook of Evolutionary Economic Geography, chapter 18 Edward Elgar Publishing.
    14. Weterings, Anet & Koster, Sierdjan, 2007. "Inheriting knowledge and sustaining relationships: What stimulates the innovative performance of small software firms in the Netherlands?," Research Policy, Elsevier, vol. 36(3), pages 320-335, April.
    15. Matthias Brachert & Christoph Hornych, 2011. "Entrepreneurial Opportunity and the Formation of the Photovoltaic Industry in Eastern Germany," ERSA conference papers ersa10p1460, European Regional Science Association.
    16. Guido Buenstorf & Dirk Fornahl, 2009. "B2C—bubble to cluster: the dot-com boom, spin-off entrepreneurship, and regional agglomeration," Journal of Evolutionary Economics, Springer, vol. 19(3), pages 349-378, June.
    17. Heshmati, Almas & Lenz-Cesar, Flávio, 2013. "Determinants and Policy Simulation of Firms Cooperation in Innovation," IZA Discussion Papers 7487, Institute for the Study of Labor (IZA).
    18. Leo van Grunsven, 2006. "New Industries in Southeast Asia’s Late Industrialization: Evolution versus Creation - The Automation Industry in Penang (Malaysia) considered," Papers in Evolutionary Economic Geography (PEEG) 0611, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2006.
    19. Ron Boschma & Rik Wenting, 2011. "The spatial clustering of the Dutch banking sector in the Amsterdam region: the importance of spinoffs and mergers in the period 1850-1993," ERSA conference papers ersa10p1158, European Regional Science Association.

    More about this item

    Keywords

    Clusters; Spinoffs; Evolution of Industries; Entrepreneurs;

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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