LONG-TERM GROWTH DETERMINANTS OF YOUNG BUSINESSES IN GERMANY – THE EFFECTS OF REGIONAL CONCENTRATION AND SPECIALISATION

Anne Otto () and Dirk Fronahl ()
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Anne Otto: Institute of Employment Research, Germany
Dirk Fronahl: BAW Institute for Regional Economics Research, Germany

Romanian Journal of Regional Science, 2009, vol. 3, issue 1, 1-35

Abstract: This paper explores how different levels of regional concentration and specialisation affect the long-term growth of young firms. The sample consists of knowledge-intensive and non-knowledge-intensive West German manufacturing firms which were established in 1992 and managed to survive for 11 years. The paper examines the combined effect of regional, industrial and firm-specific determinants. The analysis of the concentration and specialisation factors takes into account the industrial and technological dimensions and the regional availability of human capital. With regard to the measures of concentration, a location in an industrial or technological agglomeration slightly reduces the growth rate of start-ups. The same negative, but stronger, effect can be observed for measures of competition. Furthermore, our results suggest that start-ups exhibit higher growth rates, the more highly specialised the region is in which they are located.

Keywords: firm growth; regional concentration; regional specialisation and diversification; GLS model (search for similar items in EconPapers)
JEL-codes: L25 O30 R11 R12 (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:rrs:journl:v:3:y:2009:i:1:p:1-35

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