submarkets and the evolution of market structure we construct a model of industry evolution in which the central force for change is the creation and destruction of submarkets firms expand when they are able to exploit new opportunities that arrive in the form of submarkets they contract and ultimately exit when the submarkets in which they operate are destroyed this simple framework can transparently explain a wide range of well known regularities about industry dynamics most notably the subtle relationships between size age growth and survival data on the laser industry where submarkets are prominent further illustrate the ability of the model to explain distinctive patterns in the evolution of industries and firms

triangulating regional economies realizing the promise of digital data abstract innovative data sources offer new ways of studying spatial and temporal industrial and regional development our approach is to study the development of an entrepreneurial regional economy through a comprehensive analysis of its constituent firms and institutions over time our study region is defined by the location of large multinationals recruited to north carolina s research triangle park and the adjacent area we have built a database of 4200 technology intensive entrepreneurial firms that draws on over 30 distinct data sources and includes details on company founders annual firm employment and engagement with the entrepreneurial ecosystem by outlining our approach in this paper our primary objective is to create a transferable framework for analyzing regional dynamics in other locations

regional per capita income convergence in austria hofer h and worgotter a 1997 regional per capita income convergence in austria reg studies 31 1 12 the question of whether there is a tendency for regional convergence has become a central topic for economic research this paper examines growth and dispersion of output per capita across nine austrian regions and 84 districts time series analysis of the austrian regions finds no evidence for cointegration between regional output and national output we extend our empirical work by estimating convergence regressions for austrian regions and districts the rate of convergence is about 1 a year and indicates a convergence pattern with a very slow pace if we include dummy variables for type of district we estimate 2 which is a familiar value from other studies hofer h et worgotter a 1997 la convergence des revenus regionaux par tete reg studies 31 1 12 la tendance eventuelle a la convergence regionale est devenue un theme principal de la recherche economique cet article examine la cro

configuration of value chain activities the effect of pre entry capabilities transaction hazards and industry evolution on decisions to internalize we integrate insights from organizational capabilities organizational economics and industry evolution to examine industry entrants boundary choices about value chain activities and test hypotheses in 1978 2009 data from a sample of u s bioethanol producers we find support for our predictions that transaction hazards decomposed as either enduring or transient over the stages of industry evolution are positively associated with the choice to internalize value chain activities pre entry experience in an activity increases the likelihood of its internalization and reduces the effect of enduring transaction hazards on the internalization choice importantly we also distinguish between firm and founder level pre entry capabilities that is the capabilities of firms versus those of founders diversifying entrants with firm level integrative capabilities are more likely to internalize value chain activities than start ups and this effect persists over the industry s life cycle the relationship between pre entry experience with an activity and the likelihood of internalizing it is also stronger for diversifying entrants findings improve understanding of the relationships among capability development boundary choice and industry evolution

the legacy of steven klepper industry evolution entrepreneurship and geography this introductory essay of the special issue honoring steven klepper provides a synthesis of his work and places the articles of the special issue within the context of his scholarship steven klepper s pioneering work linked life cycle patterns in industry evolution to underlying micro level firm innovation dynamics and employee entrepreneurship and to the macro level implications regarding geographical agglomeration and the growth of economies taken together the lifetime of klepper s research provides an integrated account of the key industrial mechanisms at work and also sets the stage for future research as is elaborated in individual contributions to the special issue

emergent properties of a new financial market american venture capital syndication 1960 2005 the recorded transactions of venture capital investments permit a direct examination of the braudel hypothesis that regional markets evolve dynamically and interdependently in reference to a global system this hypothesis contradicts the popular belief that regional financial development is anchored in dense clusters using methods of complex graphs we analyze 159 561 transactions over nearly 45 years to demonstrate the rapid emergence of a national network of syndications a giant component emerges early in the history of the industry which subsumes the regional and sectoral subgraphs the results confirm the braudel hypothesis over the role of regional clusters rejects preferential attachment in favor of repeated ties among trusted partners and emphasizes the importance of dynamics and complex weighted graphs for the analysis of social and economic behavior

the economics of rising stars this paper analyzes an occupation in which there is substantial uncertainty about individual performance and past performance is correlated with future outcomes in equilibrium only the young enter the occupation and only the successful stay on the young are numerous and earn incomes well below what their current alternative o ffers success is rare and rewarded highly the implied distribution of earnings must have positive skewness copyright 1988 by american economic association

user industry spinouts downstream industry knowledge as a source of new firm entry and survival recent scholarship on entrepreneurship suggests that the pre entry know how of start ups embodied in their founders affects not only entry but also performance although prior work focuses on new entrants from the focal industry i e employee spinouts and academic organizations i e university spinoffs this study identifies and examines a hybrid category of start ups from downstream user industries which we call user industry spinouts we draw from the literature on evolutionary theory user innovation and industrial dynamics to propose that given the unique combination of knowledge inherited by these entrants their choices at entry and their ability to survive in the focal industry will differ with respect to other start ups we do this by extending existing work on new firm creation to investigate entry and performance in different product markets our findings based on a dataset of start ups in the semiconductor industry over a 10 year period 1997 2007 show that user industry spinou

creating venture capital industries that co evolve with high tech insights from an extended industry life cycle perspective of the israeli experience this paper presents an industry life cycle model of venture capital vc and associated startup intensive high tech clusters based on the israeli experience of the last 35 years throughout vc is considered as a new industry which when successful traverses five phases background conditions pre emergence emergence restructuring and consolidation each phase comprises a number of events and processes including policy ones a central process is vc emergence a cumulative self reinforcing process involving a number of interrelated sub processes a central sub process in the israeli case was vc startup co evolution which was the critical link between the vc emergence and the transformation of the high tech cluster into a startup intensive configuration our analysis suggests that provided appropriate background conditions prevail vc could be central vector in the transformation of existing high tech clusters 2006 elsevier b v all rights reserved

multi market competition r d and welfare in oligopoly we investigate a multi market cournot model with strategic process research and development r d investments wherein a multi market firm meets new competitors that enter one of the markets we show that entry can enhance the total r d expenditures of the multi market firm moreover the incumbent s profit nonmonotonically changes as the number of entrants increases depending on the fixed entry costs and r d technologies both insufficient and excess entry can appear our results imply that diversification of their products can be a useful strategy for firms

founder backgrounds and the evolution of firm size to what extent are firm size differences influenced by entrepreneurs pre founding experience and do these differences persist over time we analyze these questions using a novel data set assembled for australian and new zealand wine producers on their heritage and sizes at various ages our findings indicate that on average firms founded by individuals with prior wine industry experience are larger initially and remain larger for at least the next 20 years using additional data on professional backgrounds export scope and the size of the firms at which experienced founders previously worked we explore alternative mechanisms that could have generated these persistent size differences copyright 2011 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

one or more growth processes evidence from new italian firms the paper proposes a descriptive model of firm growth which assumes that learning processes are conditional on existing competencies of the firm and its founders we suggest the idea that firms who do not grow under all realizations of potentially profitable opportunities can be considered as zero learning in order to explain why some firms are zero learning and how these are different from growing ones we put forward and discuss the hypothesis that both start up size and founders pre entry history affect the firm s ability to adjust to market using a sample of 3 905 italian firms born in 1999 and 2000 we find that individual competencies influence start up size but not directly growth we also find a significant nonlinear relationship between start up size and growth implying that firms which were born smaller than a given size grow significantly less the results support the hypothesis that multiple and heterogeneous growth processes coexist and that the growth process of microfirms below a given organizational threshold may be structurally different in the long run from that of firms starting up above that threshold

path dependence research in regional economic development cacophony or knowledge accumulation henning m stam e and wenting r path dependence research in regional economic development cacophony or knowledge accumulation regional studies the concept of path dependence has gained momentum in the social sciences particularly in economic geography this paper explores the empirical literature on path dependence and path creation in regional economic development it offers a critical reflection on these studies and outlines commonalities and problems in research designs and empirical testing the review suggests that the popularity of the path dependence concept in regional studies has led to a cacophony of studies rather than to a purposeful accumulation of knowledge around the concept gaps are identified and guidelines are suggested for future research on path creation and path dependence in regional development henning m stam e and wenting r

hiring molecules not atoms comobility and wages what role do social connections play in the labor market a vast influential literature has detailed the ways in which ties facilitate the flow of information about job opportunities to workers as well as endorsements or referrals of workers to firms we propose that this role is not constrained to an informational one alone rather relationships between workers can enable a collective job matching process that facilitates the transfer of shared human capital from one organization to another yet comobility has been studied only occasionally and among elite workers in particular industries this study delivers both fieldwork as well as large sample analysis among all nongovernmental workers in denmark finding a 5 5 wage premium for those who move jointly instead of independently both in the full sample as well as when applying strict matching or fixed effects for workers or firms co movers whose skills are related but not identical capture a higher premium and the wage gains associated with comob

when do spinouts enhance parent firm performance evidence from the u s automobile industry 1890 1986 spinouts entrepreneurial ventures founded by ex employees of incumbent firms within the same industry have emerged in numerous industries some existing literature argues that they typically have a negative association with their parents performance because of the loss of human capital the disruption of organizational routines and subsequent adverse competitive effects more recent work however suggests that such negative effects may have been overstated and argues that there are conditions under which spinouts may be linked to enhanced performance of the parent i contribute to this literature by theorizing about and empirically testing for such conditions in particular using data from the u s automobile industry spanning 1890 to 1986 i find evidence that spinouts are associated with enhanced parent performance when they increase the parent s corporate coherence either through a the core competencies and capabilities domain by refocusing the parent s resources on the core or b the cognitive path by resolving a conflict at the top level of the parent s hierarchy i discuss implications for both research and practice

profit sharing and employment stability this paper tests the hypothesis that workers whose compensation packages contain a profit sharing component are less susceptible to layoff in the face of negative shocks to product demand than are workers paid a fixed time based wage the theory is tested on two data sets one a household survey and the other a survey of small businesses conducted by the authors the characteristics of profit sharing among small businesses by and large meet the theoretical requirements for stabilizing employment and the authors do find evidence in both samples to support the hypothesis the evidence however is of borderline statistical significance and is therefore more suggestive than definitive

exaptation dynamics and entrepreneurial performance evidence from the internet video industry this paper explores entrepreneurial strategy by analyzing the internet video industry data on entrants to the chinese internet video industry from 2006 to 2011 reveal how those that adapt to shifts in the environment outperform less flexible firms the paper also shows how exaptive processes including strategic commitment to user communities increase resilience in start ups that face such shifts these findings introduce an expanded view of entrepreneurial strategy by directly linking strategic choice to venture performance and clarifying the role of exaptation in entrepreneurship

campaign allocations under probabilistic voting we develop a probabilistic voting model where candidates compete by advertising in different media markets ads are viewed by everyone within a market and cannot be targeted to subgroups such as one candidate s partisans candidates estimate the distribution of voter preference intensities in a market and campaign ads then shift this distribution individuals with any intensity vote with some probability for each candidate we derive comparative static implications of changes in a variety of factors on the advertising decisions of each candidate using campaign advertising data from 2002 we find these results to be consistent with actual campaign allocation behavior

is it a car or a truck managerial beliefs the choice of product architecture and the emergence of the minivan market segment new markets segments are a common setting for studies in technology strategy these studies generally assume that new segments already exist or have formed following the introduction of a product innovation by an entering firm thus theory on the role of established firms in the emergence of new market segments is underdeveloped this study informs current research by explaining the product innovation decisions of established firms during the emergence of a new market segment the results of a case study on the development and commercialization of the minivan at chrysler ford and general motors between 1970 and 1985 indicate that existing theories based on managerial cognition firm capabilities economic incentives and organizational structure are insufficient to explain the decisions this article develops theory based on the interrelationship of these four mechanisms

a simple test for convergence of metropolitan income in the united states abstract the prevalent test for income convergence used in many recent studies of convergence across spatial economic units in the united states is to use a regression equation in which income growth is regressed against the initial level of income this is known as convergence that method however has been crtiticized as an instance of galton s fallacy of regression we devise a simple test for the income convergence hypothesis which does not suffer from galton s fallacy and apply it to all of the metropolitan areas of the united states for the period 1969 1995 for the test we use two income measures per capita personal income and average wages our results conclusively support convergence of per capita personal income and of wage per worker for metropolitan areas in the united states we also test for convergence the hypothesis of diminishing dispersion in income among places over time and find no support for the hypothesis

demand as a source of entry and the survival of new semiconductor firms the performance of new companies coming from the demand side of the semiconductor industry is examined and compared with the performance of entrants coming from the semiconductor industry itself and with other types of entrants by using a dataset of more than 1000 start ups founded between 1997 and 2007 around the world the article shows that start ups with a background in application sectors survive longer than spin offs from the semiconductor industry itself or than inexperienced firms founded by people previously active in university or other industries these results point strongly to the major role of demand not just as a source of innovations but also as a major driver of entry into an industry and of successful performance of new firms copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

do spinoff dynamics or agglomeration externalities drive industry clustering a reappraisal of steven klepper s work steven klepper s theory of industry clustering based on organizational reproduction and inheritance through spinoffs challenged the marshallian view on industry clustering this article provides an assessment of klepper s theoretical and empirical work on industry clustering we explore how new his spinoff theory on industry clustering was and we investigate the impact of klepper s theory on the economic geography community klepper s work has inspired especially recent literature on regional branching that argues that new industries grow out of and recombine capabilities from local related industries finally the article discusses what questions on industry location are still left open or in need of more evidence in the context of klepper s theory less

the moderating role of submarket dynamics on the product customization firm survival relationship in this paper we examine how the provision of product customization services affects firm survival integrating literatures on industry evolution product related adapting services and entry deterrence we hypothesize that the relationship between product customization the costly modification of a product to cater to customer needs and firm survival differs across industries based on the extent of submarkets we argue that in industries that feature submarkets more prominently the positive association between product customization and firm survival is stronger for two conceptually distinct and empirically distinguishable mechanisms customizing firms enter new submarkets and also deter potential entry we conclude that offering product customization services has strategic benefits that sometimes outweigh the cost of coordinating with customers

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

investing in capabilities the dynamics of resource allocation in this research we examine the dynamic capability of resource allocation to invest in operational capabilities using a computer simulation we model a process of firms competing in factor markets for opportunities to invest in existing capabilities and acquire new ones based on the simulation results we derive a set of propositions about the conditions under which there are and are not performance benefits from possessing a superior ability to search for new capabilities because the definition of what constitutes a new capability is based on a firm s preexisting capabilities we also incorporate differences in initial endowments into the analysis we find that endowment and search ability both matter and that in many circumstances the effects of possessing a superior endowment dominate the effects of superior search ability

the place of entrepreneurship in the economics that might have been it is a familiar observation that entrepreneurship is not easily accommodated within the framework of neoclassical economic theory drawing inspiration from an ancient critique of neoclassicism by veblen q j econ 12 4 373 397 1898 this paper attributes the difficulty to the tension between normative accounts of decision making as in mainstream theory and ideas of causation that are standard in the sciences normative theories naturally privilege the conjectured future over the experienced past in the quest for explanatory factors evolutionary theories elucidate instead the mechanisms of cumulative causation veblen that perpetually produce the present from the past entrepreneurship of the innovative schumpeterian kind seizes opportunities that emerge in complex evolving contexts of technological and institutional change a theory that gives due weight to cumulative causation sheds greater light on these processes than prevailing mainstream theory can and that is a key advantage of an evolutionary theory

the origin of spin offs a typology of corporate and academic spin offs we provide a typology of corporate and academic spin off types distinguishing spin offs involving new ventures from those that concern existing activities we summarize the papers published in this special issue relating them to the typology we develop we conclude by developing an agenda for further research on spin offs

whom do new firms hire using the matched employer employee data set for denmark and information on the founders of new firms we analyze the hiring choices of all new firms that entered from 2003 to 2010 we develop a theoretical model in which the quality of a firm s employees determines its average cost a firm s productivity is based on its pre entry experience and persistent shocks and over time firms learn about their productivity the model predicts that more productive firms are larger and hire more talented employees which gives rise to various predictions about how pre entry experience firm growth rates and firm size influence the wages firms pay to their early hires we find that beginning with the time of entry larger firms consistently pay higher wages to their new hires these are firms with greater survival prospects at the time of entry based on the pre entry backgrounds of their founders and that grow at greater rates over time both of which are predictive of the wages paid to new hires from the time of entry onward our findings suggest workers are allocated to firms according to their abilities which can give rise to enduring firm capabilities

the importance of bundling in a gorman lancaster model of earnings the idea that the labor market of individuals can be decomposed into payments to separate productive attributes has an enduring appeal in economics assuming that demographic groups differ only in their endowments of productive characteristics it is possible to rationalize observed demographic earnings differentials without invoking the arguments that characteristics specific to a particular demographic group are direct objects of employer demand by aggregating skills over all demographic groups it is possible to produce a theory of the market determination of the prices of skills held in different amounts by different demographic groups this paper considers conditions under which characteristics are uniformly priced across sectors of a multisector economy the paper presents empirical evidence that rejects uniform pricing of characteristics as a description of the us labor market bundling may account for this evudence but other hypotheses do as well authors

knowledge conversion capability and the performance of corporate and university spin offs corporate and university spin offs are often created to commercialize new technologies yet it is not clear how these spin offs transform their inventions into new products goods and services that create value in this article we use the knowledge based theory to argue that this transformation requires a knowledge conversion capability kcc that has three components conceptualization and visioning of applications of that knowledge configuration and design of potential products and other applications and the embodiment and integration of knowledge into products using data from 91 corporate and 78 university spin offs we find that these two sets of firms differ in their emphasis on the three kcc components benefit differentially from these three components in terms of their performance and vary significantly in their performance

a spatial interpretation of the density dependence model in industrial demography in this paper the density dependence model which was developed in organizational ecology is compared to the economic geographical notion of agglomeration economies there is a basic resemblance both involve some form of positive feedback between size of the population and growth the paper explores how the theoretical concepts compare to each other and if an interdisciplinary cross fertilization between both is fruitful it is found that there are a number of important similarities in the underlying theories these refer to the process of legitimation which has some close similarities to concepts derived from theories of new industrial districts such as social capital institutional thickness and innovative milieux differences remain important as well for instance the sociological interpretation of competition is not transferable into notions of agglomeration economies an important conclusion is that agglomeration effects can and should be incorporated into the density dependence model

markets externalities and the dynamic gains of openness inflows of foreign knowledge can be the key for developing countries to catch up with the world technology frontier in this paper i construct a simple tractable model to analyze a the incentives of foreign firms to bring their know how to a developing country and b the incentives of domestic firms to invest in their own know how the model embeds the two mechanisms typically considered separately in the literature for the diffusion of knowledge externalities and markets the relative preponderance of these mechanisms significantly changes the dynamic implications of openness notably openness allows developing countries to fully catch up only when market transactions fully dominate the diffusion of ideas while externalities can also push domestic firms to upgrade their productivity the equilibrium exposure to ideas in the country is always below the frontier and asymptotically the country would remain importing foreign know how however in general the dynamic gains of openness are substantial

institutions and diversification related versus unrelated diversification in a varieties of capitalism framework the varieties of capitalism literature has drawn little attention to industrial renewal and diversification while the related diversification literature has neglected the institutional dimension of industrial change bringing together both literatures the paper proposes that institutions have an impact on the direction of the diversification process in particular on whether countries gain a comparative advantage in new sectors that are close or far from what is already part of their existing industrial structure we investigate the diversification process in 23 developed countries by means of detailed product trade data in the period 1995 2010 our results show that relatedness is a stronger driver of diversification into new products in coordinated market economies while liberal market economies show a higher probability to move in more unrelated industries their overarching institutional framework gives countries more freedom to make a jump in their industrial evolution in particular we found that the role of relatedness as driver of diversification into new sectors is stronger in the presence of institutions that focus more on non market coordination in the domains of labor relations corporate governance relations product market relations and inter firm relations c 2015 elsevier b v all rights reserved less

regional convergence and national inequality this paper explores the implications of regional income convergence for measures of inequality at the national level in general such convergence occurs as poorer regions overtake more developed ones it is difficult to imagine any realistic scenario in which rising incomes in poorer regions would not have the effect of reducing absolute poverty at the same time it seems reasonable to assume that national inequality would fall as the mean incomes in the various regions converge given these general presumptions the recent economic history of regional convergence between the southern united states and the rest of the nation is quite puzzling over the last twenty five years mean family income in the southern united states has gone from about 80 of the national mean to about 93 at the same time inequality in the south and that in the non south have been changing only slightly when measured by gini coefficients under these circumstances with no serious deterioration in intraregional measures of inequality we would expect to observe a substantial reduction in national inequality as these two broad regions converge in mean incomes nevertheless there has been no significant decline in the national gini coefficient this apparent paradox is in contrast to an earlier period in u s history in which regional convergence occurred while national inequality was falling smolensky 1961 1963 the purpose of this paper is to demonstrate that the relationship between regional convergence and overall inequality is far from obvious in particular we shot that the convergence of mean incomes among regions ceteris paribus is not a sufficient condition for a reduction in common measures of ov erall inequality such as the gini coefficient the ceteris paribas conditions here are that the distribution of population across regions and the relative distribution of income within each region are held constant the proof of this assertion is made in section ii in section iii we demonstrate the relevance of this analysis to the u s case we show that the simple mean convergence of family incomes between the southern united states and the rest of the nation over the last twenty five years should not have been expected to have a direct effect on national inequality the naive link between regional income convergence and national income distribution does not hold up in this important case hence the arguments of section ii are more than analytical curiosa in a situation where the direct effects of income convergence are insufficient to reduce overall inequality there is the possibility that the broader process of regional convergence achieves this result more indirectly regional convergence may involve economic changes that work on intra regional income distributions or the distribution of population across regions in ways favorable to greater national equality in section iv we speculate on such indirect effects from a theoretical point of view we conclude that the direction and extent of such interactions are not obvious

the spatial evolution of the british automobile industry does location matter this article aims to describe and explain the spatial evolution of the automobile sector in great britain from an evolutionary perspective this analysis is based on a unique database of all entries and exits in this sector during the period 1895 1968 collected by the authors cox regressions show that spinoff dynamics agglomeration economies and time of entry have had a significant effect on the survival rate of automobile firms during the period 1895 1968

mobility and modality trends in us state personal income we examine the mobility and modality trends in us state per capita personal income and its components during the 1929 1999 period we find strong evidence of convergence for states but that the tendency towards convergence and the associated mobility within the distribution varies during the period and especially for the 1980s our analysis of convergence by income component suggests that transfer income contributes more to the observed convergence than does asset income we also note that distributional mobility need not be accompanied by high rank mobility and find that trends toward convergence in the us have tended to preserve rank ordering cet article cherche a examiner les tendances de mobilite et de modalitequant aux revenus personnels par tete et a ses composants aux etats unis pendant la periode qui va de 1929 a1999 il s avere de fortes preuves d une convergence entre etats qui varie au cours de la periode etudiee et qui va de pair avec une variation de la mobilite associee au sein de

selection and firm survival evidence from the shipbuilding industry 1825 1914 several theories of firm performance can explain the well known observation that survival is positively related to age however a more mundane explanation selection bias driven by variations in firm quality may also underlie the phenomenon this paper employs a 90 year plant level panel data set on the u s iron and steel shipbuilding industry of the nineteenth and early twentieth centuries to discriminate between the explanations the shipbuilding industry exhibits the usual joint dependence of survival on age and size but this dependence is eliminated after controlling for heterogeneity by using preentry experience as a proxy for firm quality the evidence points to a dominant role for selection bias in creating the age dependence of survival at the same time preentry experience is found to have a large and extremely persistent effect on survival and this finding is inconsistent with standard explanations for the role of preentry experience on firm performance

market selection along the firm life cycle this paper analyses market selection in french manufacturing goods markets over the last decade under the hypothesis that the competitive challenges which firms have to face may change along its life cycle we find that on average exiting firms display below average performance levels in terms of profitability and productivity moreover young firms are challenged not because of their relative efficiency they rapidly reveal themselves more efficient than old firms but in terms of industry concentration and turbulence this result reveals the presence of barriers to firm growth as an important driver of industry dynamics

time should tell more evolutionary economic geography and the challenge of history abstractevolutionary economic geography theory stresses the importance of time and history to explain the evolution of regional economies yet consistent empirical treatment of longitudinal patter

entrepreneurial spawning and firm characteristics we analyze the implications of the decision to spawn or to retain a new product for the nature and evolution of the firm in our model a new product is spawned if the fit between the product and its parent firm organization is not adequate we focus on the impact of the firm s history of spawning decisions on firm characteristics such as size focus profitability and innovativeness and analyze its role in shaping firm dynamics in accordance with the empirical literature our model predicts that older firms innovate less spawn less are more diversified and less profitable and that firms with more valuable general or specialized resources innovate and spawn more echoing seemingly contradictory empirical findings our model predicts that small focused firms large diversified firms innovate and spawn more and are more profitable when sample heterogeneity is driven by the importance of organizational fit the value of general resources this paper was accepted by bruno cassiman business strategy

the dynamics of rapid industrial growth evidence from sweden s information technology industry 1990 2004 sweden s information technology it industry expanded through an inflow of new entrants during the 1990s its evolution was analyzed using ecological models of organizational founding and disbanding controlling for the effects of economic conditions this study analyzed the effects of density dependence age imprinting rate dependence and the origin of new entrants on the industry the results indicate that the inflow was comprised of start ups that proved to be relatively short lived in contrast new entrants that originated as part of incumbent firms that were diversifying in it stabilized the industry by depressing its disbanding rate and facilitating the entry of new firms in explaining the dynamics of the industry the analysis supports the established models of density dependence age dependence imprinting and organizational origin copyright 2009 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

no place like home relocation capabilities and firm survival in the german machine tool industry after world war ii we explore the extent to which organizational capabilities are location specific by studying the location choices and longevity of east german machine tool producers that relocated to west germany after world war ii relocating firms were similar in performance to experienced west german incumbents they outperformed new entrants without prewar industry experience this suggests they were able to build on capabilities acquired before the war even though relocating firms tended lo locate in industry agglomerations and in urbanized regions we find no evidence suggesting that firm performance benefited from agglomeration economies copyright 2011 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

far from the tree do private entrepreneurs agglomerate around public sector incumbents during economic transition while it is well known that state enterprises in transition economies were displaced by private enterprises at a macro level little is known about whether private entrepreneurs emerged in a way that helped preserve or shift preexisting agglomerations of industrial activity at a microgeographic level to address this question we integrate competing perspectives on the role of large bureaucratic incumbents in spawning entrepreneurs we conceptualize a trade off between two countervailing effects of large incumbents on potential entrepreneurs bureaucratic socialization and exposure to capabilities this yields novel predictions about how different kinds of startups agglomerate around different kinds of incumbents we test these predictions using fine grained geographic data on founding rates by private entrepreneurs in china s bicycle manufacturing industry consistent with our theorized trade off we find evidence of a nonmonotonic effect of incumbent size on local founding rates by private entrepreneurs additional moderating effects are consistent with boundary conditions on the hypothesized mechanisms our results provide the first empirical investigation of the extent to which entrepreneurial activity agglomerated around public sector incumbents during economic transition we discuss how these insights add to the understanding of economic transition as well as how the context of economic transition adds to the understanding of entrepreneurial spawning

industry evolution in varieties of capitalism a comparison of the danish and us wind turbine industries in this study we combine klepper s framework on the evolution of industries with the varieties of capitalism approach to argue that industry evolution is mediated by institutional differences we expect that new industries will evolve with a stronger connection to established industries in coordinated marked economies than in liberal market economies our assumptions are supported by the survival analysis of us and danish wind turbine manufacturers from 1974 to 2014

a good riddance spin offs and the technological performance of parent firms how do spin offs new ventures created by former employees of an incumbent firm affect the technological performance of their parents conventional wisdom holds that spin offs hurt parent firms the parent loses key staff routines are disrupted and performance declines although having some basis in fact we think the negative effects are overstated we argue that spin offs can enable parent firms to realign with their environment thereby avoiding the oncoming obsolescence arising from the combination of organizational inertia and environmental drift using data from the hard disk drive industry we find evidence that although the main effect of having a spin off on a parent firm s technological performance is positive the overall impact of a spin off depends upon the technological sophistication of the spin off and the time since the spin off occurred indeed parent firms of technologically sophisticated successful spin offs initially suffer poorer technological performance but over time they outperform firms that had no spin offs both effects are amplified to the extent that the spin off is more successful which we attribute to both increased environmental realignment and the positive signal that successful spin offs transmit to the broader labor market about the parent organization s reputation as an incubator of entrepreneurs and a desirable place to work

the interruption of income convergence and income growth in large cities in the 1980s recent studies have documented the divergence of per capita personal income among regions of the us in the 1980s following many decades of income convergence this paper establishes the same patter

regional growth and convergence evidence from the united states tsionas e g 2000 regional growth and convergence evidence from the united states reg studies 34 231 238 the paper considers regional convergence in the us both g and convergence tests indicate that in the period 1977 96 regional incomes do not converge yet kernel density estimates of the distribution show some variation in the tail characteristics of the distribution using finite normal mixtures to examine time invariance of the distribution in a more formal way the paper concludes that the distribution of the logarithms of regional income has indeed shown very little time variation the distribution of income percentages shows some mobility there is a structural break in mixing probabilities mixing means and variances but the mobility is not strong enough to imply a radical change in the co movement patterns of regional means tsionas e g 2000 la croissance et la convergence regionales des preuves provenant des etats unis reg studies 34 231 238 cet article cherche a etudie

a capability based view of competitive heterogeneity the question of how firms differ is paramount to strategy scholars this question has motivated empirical research on the factors influencing performance differences among close competitors it also has motivated work on factors that increase or decrease the mean performance of firms in an industry theories about resources and capabilities tend to dominate discussions of heterogeneity in performance and superior performance yet the strategy field lacks a cumulative body of empirical work showing how firms differ this article derives conclusions and questions from empirical work on capabilities we then discuss work that complements but lies beyond the boundaries of traditional capabilities research we conclude by suggesting approaches to and areas of future work

job machine think tank or both what makes corporate spin offs different one way through which knowledge and technology transfer can take place is through the foundation of new firms by former employees of incumbent private firms in this paper we examine whether knowledge transferred from the incumbent causally affect employment growth and post entry innovation activities of the new firm we focus on start ups for which a new idea a new product technology production process or management concept which the founder developed during her work as an employee was essential for setting up the new business these firms are denoted corporate spin offs using data from german start ups founded in the period from 2005 to 2008 we apply nearest neighbour propensity score matching we find that corporate spin offs outperform other start ups founded by former employees of incumbent private firms that are not based on an essential idea in terms of post entry innovation activities however we cannot show that corporate spin offs benefit from the transferred idea in terms of employment growth we conclude that a transferred idea is primarily an input factor and a stimulus for subsequent post entry innovation activities of corporate spin offs

creation and pursuit of entrepreneurial opportunities an evolutionary economics perspective considerable debate surrounds the concept of entrepreneurial opportunities this paper approaches the opportunity concept from an evolutionary market process perspective it argues that new opportunities for entrepreneurial activity frequently emerge as by products of market competition agents may deliberately or unwittingly create opportunities organizational development and the evolution of industries are additional sources of new entrepreneurial opportunities at the same time they enable agents to acquire the skills required to exploit these opportunities

the capabilities of new firms and the evolution of the us automobile industry firms that diversify into new and existing industries typically outperform de novo entrants but in some new industries diversifying firms are displaced by later entering de novo firms little is known about when and how new firms can overcome the advantages of diversifying firms this is investigated for one industry automobiles where new firms had considerable success all the entrants into the industry from its inception in 1895 through 1966 are identified the heritage of every entrant into the industry is traced including the founders of de novo entrants to explore how time of entry and pre entry experience affected firm survival while diversifying firms on average outperformed de novo entrants de novo entrants founded by individuals that worked for the leading automobile firms outperformed all firms and dominated the industry this is attributed to the novel organizational challenges faced by automobile firms which made the leading firms ideal training grounds for new entrants the implications of these findings for firm capabilities industry competition and regional economic development are discussed copyright 2002 oxford university press

balanced budget redistribution as the outcome of political competition a comment this comment is concerned with the relation between the basic model of elections and income redistribution in lindbeck and weibull 1987 and the model in coughlin 1986a its purpose is to i isolate the small set of assumptions that separate these closely related models ii identify a special case of the lindbeck weibull model where their results immediately provide direct extensions of four of the results in my paper and iii point out that one of the lemmata in my paper identifies the precise location of the equilibrium income distribution for this important special case of the lindbeck weibull model the comment also relates these observations to lindbeck and weibull s example of familiar assumptions that satisfy their sufficient conditions for the existence of a political equilibrium

spinoffs and the ascension of silicon valley this article analyzes firm entry and performance in the semiconductor industry from the introduction of the integrated circuit ic in 1965 until 1987 during this period the industry which was initially concentrated on the east coast of the united states became increasingly clustered in silicon valley sv california this location shift was accompanied by a change in the technology used to produce semiconductor devices by studying how diversifiers and new firms enter into ic production and the technology they choose to produce ics we document the process of growth of sv in particular we analyze how agglomeration economies as well as the heritage of new firms founders affect the opportunities pursued by entrants and their long term likelihood of success we find that ic entrants in sv were more likely to enter at the technological frontier than ic entrants in other clusters however we find no evidence suggesting that being located in a cluster helped existing ic producers that were not initially at the technological frontier to catch up with the rest of the industry examining long term performance we find that firms that become top producers are disproportionately spinoffs of leading firms or diversifiers with a transistor background while most of these firms were located in sv after controlling for heritage and background location has no significance on the likelihood of becoming a top producer

practice makes perfect entrepreneurial experience curves and venture performance abstract this study tackles the puzzle of why increasing entrepreneurial experience does not always lead to improved financial performance of new ventures we propose an alternate framework demonstrating how experience translates into expertise by arguing that the positive experience performance relationship only appears to expert entrepreneurs while novice entrepreneurs may actually perform increasingly worse because of their inability to generalize their experiential knowledge accurately into new ventures these negative performance implications can be alleviated if the level of contextual similarity between prior and current ventures is high using matched employee employer data of an entire population of swedish founder managers between 1990 and 2007 we find a non linear relationship between entrepreneurial experience and financial performance consistent with our framework moreover the level of industry geographic and temporal similarities between prior and current ventures positively moderates this relationship our work provides both theoretical and practical implications for entrepreneurial experience people can learn entrepreneurship and pursue it with greater success as long as they have multiple opportunities to gain experience overcome barriers to learning and build an entrepreneurial experience curve

technological pre adaptation speciation and emergence of new technologies how corning invented and developed fiber optics this article investigates how established firms innovate and even initiate new technological trajectories we build on and expand the notion of technological speciation to describe how a new technology emerges when a firm leverages its technological knowledge into a new application domain current research on technological speciation does not investigate how firms accumulate the technological knowledge which they eventually redeploy into different domains nor does it clarify the precise role of luck historical accidents and foresight strategy in shaping the overall process this requires a finer grained investigation of the microprocesses and evolutionary forces underlying the dynamics of technological speciation to this end we use a longitudinal case study of corning s invention and development of fiber optics technology we focus less on testing theory and more on describing a phenomenon to generate new theoretical insight

an ecological analysis of competition among us communities we apply the ecological concept of the organization s niche pioneered by john freeman and mike hannan to the study of geographic communities we define a community s market niche by the ties linking a community to the industries on which it depends for growth we then hypothesize that the extent to which a community s market niche is occupied by other communities is a source of constraint and opportunity depending on the geographical locations of the communities that occupy the same market niche geographically distant communities occupying similar market niches are hypothesized to experience primarily constraint arising from competition for opportunities of exchange geographically proximate communities occupying similar market niches are hypothesized to face constraint arising from competition for exchange opportunities as well as opportunity arising from access to valuable resources associated with the existence of similar others empirical analyses of firm foundings and exits across us communities support these hypotheses implications of our findings for ecological research on the niche and for the literature on communities are discussed copyright 2012 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

convergence clubs and endogenous growth recent data indicate a wide disparity in the growth performance of different nations such disparities have usually been taken to imply that there is to much catching up or convergence taking place using a modified version of the endogenous growth approach we show that convergence is occurring but in a non equalizing manner the world appears to be segmented into two mutually exclusive convergence clubs with the members of the richer club enjoying a real income per capita which is significantly higher than that enjoyed by those belonging to the poorer club copyright 1992 by oxford university press

increasing returns and the foundations of unemployment theory current approaches to macroeconomic theory divide roughly into two basic schools of thought one approach typically associated with rational expectations views the economy as basically at or near walrasian market clearing equilibrium in which case it becomes very difficult to explain away convincingly the undeniable persistence at times of involuntary unemployment another approach views the underemployed economy as being in a state of temporary fixed price disequilibrium in which case aside from having to repress suspicions that the essence of effective demand failure might not have to do with prices fixed at wrong values there is a lot of rationalising to be done about why profitable adjustments are so slow this paper argues that something like an internally consistent theory of steady state involuntary unemployment is possible and even plausible the cornerstone of this third approach is increasing returns to scale which blocks unemployed agents from breaking out of a low level equilibrium trap unless there is overall coordination or stimulation a simple model is presented which contains the basic ideas

steven klepper recipient of the 2011 global award for entrepreneurship research this article reviews the academic contributions of the 2011 receiver of the global award for entrepreneurship research professor steven klepper carnegie mellon university the global award consists of 100 000 euro and a statuette of the internationally renowned swedish sculpture carl milles klepper has made breakthrough analyses in the realm of industrial dynamics emphasizing the regularities in the time paths of entry of new producers exit of incumbent firms spin offs and innovation his work is predominantly empirical but he has also played an essential role in developing more rigorous theoretical models of phenomena such as spin offs of particular importance is how klepper has managed to link traditional neoclassical models with evolutionary theory as well as entrepreneurship research with mainstream economics

inheriting knowledge and sustaining relationships what stimulates the innovative performance of small software firms in the netherlands abstract previous studies showed that firms established by experienced founders have higher survival rates and employment growth but the potential effect of pre entry experiences on innovation remains unclear using an original dataset we examine the effect of founder s experiences the relationship with the founder s previous employer and spatial proximity to the previous workplace on the innovative performance of small software firms in the netherlands apart from entrepreneurial experiences the results suggest no effect of pre entry experiences continued contacts with the founder s previous employer appear to limit the firm s innovative performance but firms do benefit from being established near the previous workplace

us regional income convergence a spatial econometric perspective rey s j and montouri b d 1999 us regional income convergence a spatial econometric perspective reg studies 33 143 156 this study reconsiders the question of us regional economic income convergence from a spatial econometric perspective recently developed methods of exploratory spatial data analysis provide new insights on the geographical dynamics of us regional income growth patterns over the 1929 94 period strong patterns of both global and local spatial autocorrelation are found throughout the study period and the magnitude of global spatial autocorrelation is also found to exhibit strong temporal co movement with regional income dispersion a spatial econometric analysis of the familiar baumol specification reveals strong evidence of misspecification due to ignored spatial error dependence because of this dependence shocks originating in one state can spillover into surrounding states potentially complicating the transitional dynamics of the convergence process rey s j et montouri

elections and income redistribution this paper has analyzed a model of elections in which each candidate selects a reputation for the distribution of income that can be expected if he is elected the first result established that whenever there are three or more groups of voters and no single group has half or more of the voters if the candidates believe that the voters choices are determined solely by the candidates redistributional reputations then there is no electoral equilibrium the candidates expectations about the voters choices were then reformulated using a qualitative response model the next result established that this alternative model leads to the existence of electoral equilibria the remainder of the paper analyzed the nature of these equilibria for any given electorate among other things the results established that there is always a unique equilibrium provided a simple procedure for finding the precise location of this equilibrium and showed that this location implicitly maximizes the sum of the voters utility functions on the possible income distributions the penultimate sections provided some simple examples which illustrate the main results in the paper and a discussion of these results in terms of the politics of redistribution

urban amenities and agglomeration economies the locational behaviour and economic success of dutch fashion design entrepreneurs the spatial clustering of industries is traditionally explained by agglomeration economies benefiting co located firms the focus on firms rather than people has been challenged by florida arguing that urban amenities attract creative people to certain cities on the basis of a questionnaire an analysis is made of the extent to which these two mechanisms affect the locational behaviour of dutch fashion design entrepreneurs it is found that fashion design entrepreneurs consider urban amenities to be more important than agglomeration economies for their location decision designers located in the amsterdam cluster do not profit from agglomeration economies as such but rather from superior networking opportunities with peers both within and outside the cluster

firm entry and institutional lock in an organizational ecology analysis of the global fashion design industry few industries are more concentrated geographically than the global fashion design industry we analyze the geography and evolution of the fashion design industry by looking at the yearly entry rates at the city level in contrast to other industry studies we find that legitimation processes operate locally and competition processes globally this result points to the rapid turnover of ideas in the fashion design industry on the one hand and the global demand for fashion apparel on the other hand we attribute the decline of paris in the post war period to institutional lock in which prevented a ready to wear cluster to emerge despite the presence of the haute couture cluster an extended organizational ecology model provides empirical support for this claim

implementing the share economy in a recent series of papers and books weitzman 11 12 13 has put forward a new policy prescription for the macroeconomy in weitzman s view significant improvements in the performance of the macroeconomy can be achieved by altering key structural relationships specifically the wage contract between workers and firms weitzman labels this approach the share economy because workers wages are no longer contracted for in nominal terms but vary with an index of the firm s performance usually profits that is the workers share in the firm s success or failure the point of weitzman s work is not that participation increases worker s motivation or productivity in weitzman s view share contract wage agreements create a pool of latent excess demand for labor within firms firms then behave in the labor markets as buyers who would expand employment at the going wage if they could this contrasts with the more familiar case where firms are willing to expand employment only if the wage is reduced weitzman s claims for economies implementing share contracts are impressive lower natural unemployment rates less susceptibility to layoffs caused by macroeconomic shocks and reduced inflation in weitzman s world firms are monopolistic competitors operating under increasing returns to scale it is these two features that lead to wage and price inflexibility and therefore to potential unemployment 10 weitzman makes his case for the share economy by examining a transition economy where conversion from a wage system to an equivalent profit sharing system yields the same pay 13 945 even in this case where total payments to workers are identical weitzman shows that the share economy expands output and employment while lowering price 13 945 although conversion to a share economy may seem desirable from a macroeconomic view