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Entry by Spinoff in a High-tech Cluster

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

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.

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Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 03-11.

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Date of creation: 2003
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Handle: RePEc:aal:abbswp:03-11
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  1. Bent Dalum, 1995. "Local and global linkages the radiocommunications cluster in Northern Denmark," Industry and Innovation, Taylor & Francis Journals, vol. 2(2), pages 89-109.
  2. repec:tpr:qjecon:v:116:y:2001:i:3:p:805-851 is not listed on IDEAS
  3. Andrew A. King & Christopher L. Tucci, 2002. "Incumbent Entry into New Market Niches: The Role of Experience and Managerial Choice in the Creation of Dynamic Capabilities," Management Science, INFORMS, vol. 48(2), pages 171-186, February.
  4. Raghuram G. Rajan & Luigi Zingales, 2000. "The Firm as a Dedicated Hierarchy: A Theory of the Origin and Growth of Firms," NBER Working Papers 7546, National Bureau of Economic Research, Inc.
  5. Arthur, W. Brian, 1990. "'Silicon Valley' locational clusters: when do increasing returns imply monopoly?," Mathematical Social Sciences, Elsevier, vol. 19(3), pages 235-251, June.
  6. Steven Klepper & Sally Sleeper, 2005. "Entry by Spinoffs," Management Science, INFORMS, vol. 51(8), pages 1291-1306, August.
  7. Bent Dalum & Christian Ø.R. Pedersen & Gert Villumsen, 2002. "Technoligical Life Cycles Regional Clusters Facing Disruption," DRUID Working Papers 02-10, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  8. April Franco & Darren Filson, 2000. "Knowledge diffusion through employee mobility," Staff Report 272, Federal Reserve Bank of Minneapolis.
  9. repec:tpr:qjecon:v:110:y:1995:i:3:p:585-603 is not listed on IDEAS
  10. Cooper, Arnold C., 1985. "The role of incubator organizations in the founding of growth-oriented firms," Journal of Business Venturing, Elsevier, vol. 1(1), pages 75-86.
  11. Klepper, Steven, 2001. "Employee Startups in High-Tech Industries," Industrial and Corporate Change, Oxford University Press, vol. 10(3), pages 639-74, September.
  12. von Hippel, Eric, 1987. "Cooperation between rivals: Informal know-how trading," Research Policy, Elsevier, vol. 16(6), pages 291-302, December.
  13. Steven Klepper & Kenneth L. Simons, 2000. "The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 728-760, August.
  14. Mark Lorenzen & Volker Mahnke, 2002. "Global Strategy and the Acquisition of Local Knowledge How MNCs Enter Regional Knowledge Clusters," DRUID Working Papers 02-08, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  15. Anton, James J & Yao, Dennis A, 1995. "Start-ups, Spin-offs, and Internal Projects," Journal of Law, Economics and Organization, Oxford University Press, vol. 11(2), pages 362-78, October.
  16. Constance E. Helfat & Marvin B. Lieberman, 2002. "The birth of capabilities: market entry and the importance of pre-history," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 725-760, August.
  17. Olav Sorenson, 2003. "Social networks and industrial geography," Journal of Evolutionary Economics, Springer, vol. 13(5), pages 513-527, December.
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