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Spinoffs and Clustering

Author

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  • Russell Golman
  • Steven Klepper

Abstract

Geographic clustering of industries is typically attributed to localized, pecuniary or non-pecuniary externalities. Recent studies across innovative industries suggestthat explosive cluster growth is associated with the entry and success of spinoff firms. We develop a model to explain the patterns regarding cluster growth and spinoff formation and performance, without relying on agglomeration externalities. Clustering naturally follows from spinoffs locating near their parents. In our model, firms grow and spinoffs form through the discovery of new submarkets based on innovation. Rapid and successful innovation creates more opportunities for spinoff entry and drives a region’s growth.

Suggested Citation

  • Russell Golman & Steven Klepper, 2013. "Spinoffs and Clustering," Papers in Evolutionary Economic Geography (PEEG) 1309, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2013.
  • Handle: RePEc:egu:wpaper:1309
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    File URL: http://econ.geo.uu.nl/peeg/peeg1309.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Steven Klepper
      by Dick Langlois in Organizations and Markets on 2013-05-29 01:31:21

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    Cited by:

    1. 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.
    2. Buenstorf, Guido & Costa, Carla, 2018. "Drivers of spin-off performance in industry clusters: Embodied knowledge or embedded firms?," Research Policy, Elsevier, vol. 47(3), pages 663-673.
    3. Haifeng Qian, 2018. "Knowledge-Based Regional Economic Development: A Synthetic Review of Knowledge Spillovers, Entrepreneurship, and Entrepreneurial Ecosystems," Economic Development Quarterly, , vol. 32(2), pages 163-176, May.
    4. Guido Buenstorf, 2017. "Schumpeterian Incumbents and Industry Evolution," Economic Complexity and Evolution, in: Andreas Pyka & Uwe Cantner (ed.), Foundations of Economic Change, pages 283-297, Springer.

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    More about this item

    Keywords

    Agglomeration; Clusters; Entry; Innovation; Spinoffs;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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