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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. Córdoba, Juan-Carlos, 2008. "On the distribution of city sizes," Journal of Urban Economics, Elsevier, vol. 63(1), pages 177-197, January.
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  9. repec:rje:randje:v:37:y:2006:2:p:235-256 is not listed on IDEAS
  10. 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.
  11. 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.
  12. Glenn Ellison & Edward L. Glaeser & William Kerr, 2007. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," NBER Working Papers 13068, National Bureau of Economic Research, Inc.
  13. 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.
  14. Guido Buenstorf & Steven Klepper, 2005. "Heritage and Agglomeration: The Akron Tire Cluster Revisited," Papers on Economics and Evolution 2005-08, Philipps University Marburg, Department of Geography.
  15. Feldman, Maryann P, 2001. "The Entrepreneurial Event Revisited: Firm Formation in a Regional Context," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 861-91, December.
  16. Glenn Ellison & Edward L. Glaeser, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," Harvard Institute of Economic Research Working Papers 1862, Harvard - Institute of Economic Research.
  17. Jan Eeckhout, 2004. "Gibrat's Law for (All) Cities," American Economic Review, American Economic Association, vol. 94(5), pages 1429-1451, December.
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