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Spinoffs and Clustering

  • Russell Golman

    ()

  • Steven Klepper

    ()

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.

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File URL: http://econ.geo.uu.nl/peeg/peeg1309.pdf
File Function: Version May 2013
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Paper provided by Utrecht University, Section of Economic Geography in its series Papers in Evolutionary Economic Geography (PEEG) with number 1309.

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Length: 41 pages
Date of creation: May 2013
Date of revision: May 2013
Handle: RePEc:egu:wpaper:1309
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  1. William Kerr & Edward Glaeser & Glenn Ellison, 2007. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," Working Papers 07-13, Center for Economic Studies, U.S. Census Bureau.
  2. Guido Buenstorf & Christina Guenther, 2011. "No place like home? Relocation, capabilities, and firm survival in the German machine tool industry after World War II," Industrial and Corporate Change, Oxford University Press, vol. 20(1), pages 1-28, February.
  3. Juan Carlos Cordoba, 2003. "On the Distribution of City Sizes," Urban/Regional 0302002, EconWPA.
  4. Duranton, Gilles & Overman, Henry G, 2002. "Testing for Localization Using Micro-Geographic Data," CEPR Discussion Papers 3379, C.E.P.R. Discussion Papers.
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  7. Edward L. Glaeser & Glenn Ellison, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," American Economic Review, American Economic Association, vol. 89(2), pages 311-316, May.
  8. Gilles Duranton, 2007. "Urban Evolutions: The Fast, the Slow, and the Still," American Economic Review, American Economic Association, vol. 97(1), pages 197-221, March.
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  13. repec:rje:randje:v:37:y:2006:2:p:235-256 is not listed on IDEAS
  14. Guy Dumais & Glenn Ellison & Edward Glaeser, 1997. "Geographic Concentration as a Dynamic Process," NBER Working Papers 6270, National Bureau of Economic Research, Inc.
  15. Ron A. Boschma & Rik Wenting, 2007. "The spatial evolution of the British automobile industry: Does location matter?," Industrial and Corporate Change, Oxford University Press, vol. 16(2), pages 213-238, April.
  16. Stefano Breschi & Francesco Lissoni, 2003. "Mobility and Social Networks: Localised Knowledge Spillovers Revisited," KITeS Working Papers 142, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Mar 2003.
  17. Buenstorf, Guido & Klepper, Steven, 2010. "Why does entry cluster geographically? Evidence from the US tire industry," Journal of Urban Economics, Elsevier, vol. 68(2), pages 103-114, September.
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