New firm location decisions, relative to incumbents may be based on a choice between two types of advantages: natural advantages or those that arise from social embeddedness, the latter of which may particularly include knowledge spillovers. We analyze the relative importance of geographically...

We analyze the extent to which endogenous cultural amenities affect the spatial equilibrium share of high-human-capital employees. To overcome endogeneity, we draw on a quasi-natural experiment in German history and exploit the exogenous spatial distribution of baroque opera houses built as a...

We analyze the effect of industry, region, and time on new businesssurvival rates by means of a multi-dimensional approach. The data relateto West German districts in the 1983-2000 period. The survival chancesof start-ups tend to be relatively low in industries characterized by ahigh minimum...

We test whether new firms locate close to incumbent firms of the same industry. Tendencies to coagglomerate may explain the general wisdom that industry location is highly persistent over time. We perform separate analysis for East and West Germany which enables us to study two integrated areas...

This article analyses the effects of industry-, regional- and firm-level characteristics on the post-entry performance of new businesses by means of an econometric survival time model. First preference is given to an accelerated failure time model assuming a log-logistic distribution. The data...

Small and medium-sized firms frequently are viewed as the drivers of radical innovation. However, they often do not have the focus and commitment necessary for improving and extending the innovation, tasks better accomplished by routinized large firms. Using a uniquely rich industry-level data...

This paper analyzes the escape-entry incentive for innovation by incumbent firms. The threat posed by the possibility of leading-edge firms entering the market influences incumbent innovation. To overcome problems of endogeneity, we apply an instrumental variable approach to analyze a rich...