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From Russia with Love: The Impact of Relocated Firms on Incumbent Survival

Oliver Falck (), Christina Guenther, Stephan Heblich () and William Kerr ()

SERC Discussion Papers from Spatial Economics Research Centre, LSE

Abstract: 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.

Keywords: Agglomeration; competition; firm dynamics; labor; Germany (search for similar items in EconPapers)
JEL-codes: R10 L10 H25 O10 J20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ent, nep-geo, nep-his, nep-sbm and nep-ure
Date: 2011-08
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Related works:
Journal Article: From Russia with love: the impact of relocated firms on incumbent survival (2013) Downloads
Working Paper: From Russia with love: The impact of relocated firms on incumbent survival (2013)
Working Paper: From Russia with love: the impact of relocated firms on incumbent survival (2011) Downloads
Working Paper: From Russia with Love: The Impact of Relocated Firms on Incumbent Surv ival (2011) Downloads
Working Paper: From Russia with Love: The Impact of Relocated Firms on Incumbent Survival (2010) Downloads
Working Paper: From Russia with Love: The Impact of Relocated Firms on Incumbent Survival (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:cep:sercdp:0088

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