From Russia with love
Subtitle: the impact of relocated firms on incumbent survival
By: Oliver Falck, Christina Guenther, Stephan Heblich, William R. Kerr
Contributors: Harvard Business School
Series: Working paper / Harvard Business School -- 10-112; Working paper (Harvard Business School) -- 10-112.
Publisher: Harvard Business School
Published: 2010
Place of publication: [Boston]
Language: eng
Number of pages: 28
Description: We identify the impact of local firm concentration on incumbent performance with a quasi natural experiment. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet occupied zone to prevent expropriation. We show that the regional location decisions of these firms upon moving to western Germany were driven by non-economic factors and heuristics rather than existing industrial conditions. Relocating firms increased the likelihood of incumbent failure in destination regions, a pattern that differs sharply from new entrants. We further provide evidence that these effects are due to increased competition for local resources.
Notes: "June 2010"--Publisher's website.

Includes bibliographical references.