Growth, agglomeration externalities, and survival: Evidence from Chinese manufacturing start-ups

Ruiqi Cheng, Peng Yuan and Gongxiong Jiang

Journal of Business Research, 2023, vol. 154, issue C

Abstract: Previous studies on the impact of firm growth on survival have paid little attention to agglomeration externalities. This study theoretically analyses how different agglomeration externalities affect the relationship between growth and survival. Using data from China’s manufacturing start-ups, we confirm a U-shaped relationship between the growth and survival risks of start-ups. Moreover, we find that different agglomeration externalities have heterogeneous moderating effects on this U-shaped relationship. Specifically, specialization and diversification externalities have significantly negative and positive moderating effects, respectively. The positive moderating effect of diversification externalities comes from the moderating effect of related variety externalities, whereas unrelated variety externalities have no significant moderating effect. The robustness test results support the above conclusions and suggest that the moderating effect of specialization externalities is heterogeneous in terms of firms’ resources.

Keywords: Growth strategies; Firm survival; Specialization; Diversification; Related variety (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:154:y:2023:i:c:s0148296322007743

DOI: 10.1016/j.jbusres.2022.113319

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