Spin-offs: Why geography matters

Apostolos Baltzopoulos, Pontus Braunerhjelm and Ioannis Tikoudis
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Apostolos Baltzopoulos: Department of Industrial Economics and Management, KTH Royal Institute of Technology and The Swedish Competition Authority, Stockholm, Sweden.

No 389, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: Based on unique data covering individuals, firms, industries, and regions for the 1999-2005 period, we contribute with new knowledge concerning the impact of regional variables on spin-offs. Implementing a large number of controls, as well as different estimation techniques and robustness tests, we show that Jacobian externalities have a positive effect on spin-offs. Moreover, using an entropy measure to disentangle unrelated and related variety, we conclude that the effect is confined to related variety. These findings are likely to be associated with strong welfare effects: a standard-deviation increase (decrease) in related (unrelated) variety increases spin-off propensity by approximately 25%. Other variables are shown to have economic effects of a similar magnitude but may have a different effect across sectors. Sensitivity analyses indicate that the impact of other determinants proposed in the literature (e.g., Marshallian externalities and scale effects) is too small to be detected.

Keywords: Regions; spin-offs; industries (search for similar items in EconPapers)
JEL-codes: D01 L26 R10 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2014-12-22
New Economics Papers: this item is included in nep-cse, nep-ent, nep-geo, nep-sbm and nep-ure
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Published as Baltzopoulos, Apostolos, Pontus Braunerhjelm and Ioannis Tikoudis, 'Spin-offs: Why geography matters' in Journal of Economic Geography, 2015.

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Related works:
Journal Article: Spin-offs: why geography matters (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:cesisp:0389

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