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Spin-offs: Why geography matters

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  • Baltzopoulos, Apostolos

    () (Department of Industrial Economics and Management, KTH Royal Institute of Technology and The Swedish Competition Authority, Stockholm, Sweden.)

  • Braunerhjelm, Pontus

    () (Department of Industrial Economics and Management, KTH Royal Institute of Technology, Centre of Excellence for Science and Innovation Studies (CESIS), 100 44 Stockholm, Sweden.)

  • Tikoudis, Ioannis

    () (Department of Spatial Economics, VU University Amsterdam, De Boelelaan 1105, 1081HV, and Tinbergen Institute, Gustav Mahlerplein 117, 1082MS Amsterdam.)

Abstract

Based on unique data covering individuals, firms, industries, and regions for the 1999-2005 period, we contribute with new knowledge concerning the impact of regional variables on spin-offs. Implementing a large number of controls, as well as different estimation techniques and robustness tests, we show that Jacobian externalities have a positive effect on spin-offs. Moreover, using an entropy measure to disentangle unrelated and related variety, we conclude that the effect is confined to related variety. These findings are likely to be associated with strong welfare effects: a standard-deviation increase (decrease) in related (unrelated) variety increases spin-off propensity by approximately 25%. Other variables are shown to have economic effects of a similar magnitude but may have a different effect across sectors. Sensitivity analyses indicate that the impact of other determinants proposed in the literature (e.g., Marshallian externalities and scale effects) is too small to be detected.

Suggested Citation

  • Baltzopoulos, Apostolos & Braunerhjelm, Pontus & Tikoudis, Ioannis, 2014. "Spin-offs: Why geography matters," Working Paper Series in Economics and Institutions of Innovation 389, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0389
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    References listed on IDEAS

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    Cited by:

    1. Pontus Braunerhjelm & Ding Ding & Per Thulin, 2016. "Labour as a knowledge carrier: how increased mobility influences entrepreneurship," The Journal of Technology Transfer, Springer, vol. 41(6), pages 1308-1326, December.
    2. Andrea Morrison, 2018. "Spinoffs, parents, and institutions: Evidence from the Italian motorcycle industry," Papers in Evolutionary Economic Geography (PEEG) 1840, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2018.

    More about this item

    Keywords

    Regions; spin-offs; industries;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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