From Russia with love: The impact of relocated firms on incumbent survival

Oliver Falck, Christina Guenther, Stephan Heblich and William Kerr

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: We identify the impact of local firm concentration on incumbent performance in a historic setting that has quasi-experimental characteristics. 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.

Date: 2013
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Citations: View citations in EconPapers (14)

Published in Journal of Economic Geography 3 13(2013): pp. 419-449

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Related works:
Journal Article: 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)
Working Paper: From Russia with love: the impact of relocated firms on incumbent survival (2011)
Working Paper: From Russia with Love: The Impact of Relocated Firms on Incumbent Surv ival (2011)
Working Paper: From Russia with Love: The Impact of Relocated Firms on Incumbent Survival (2010)
Working Paper: From Russia with Love: The Impact of Relocated Firms on Incumbent Survival (2010)
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