Spin-offs: Why geography matters

Apostolos Baltzopoulos, Pontus Braunerhjelm, Ioannis Tikoudis

Research output: Contribution to JournalArticleAcademicpeer-review

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 (RV), we conclude that the effect is confined to RV. 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.

Original languageEnglish
Pages (from-to)273-303
Number of pages31
JournalJournal of Economic Geography
Volume16
Issue number2
DOIs
Publication statusPublished - 2016

Fingerprint

geography
spin-off
scale effect
estimation procedure
entropy
effect
Spin-offs
Geography
welfare
determinants
industry
firm
economics
Externalities
knowledge
externality
Spin-off
Economic effect
Propensity
Robustness test

Keywords

  • Industries
  • Regions
  • Spin-offs

Cite this

Baltzopoulos, A., Braunerhjelm, P., & Tikoudis, I. (2016). Spin-offs: Why geography matters. Journal of Economic Geography, 16(2), 273-303. https://doi.org/10.1093/jeg/lbv006
Baltzopoulos, Apostolos ; Braunerhjelm, Pontus ; Tikoudis, Ioannis. / Spin-offs : Why geography matters. In: Journal of Economic Geography. 2016 ; Vol. 16, No. 2. pp. 273-303.
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Baltzopoulos, A, Braunerhjelm, P & Tikoudis, I 2016, 'Spin-offs: Why geography matters' Journal of Economic Geography, vol. 16, no. 2, pp. 273-303. https://doi.org/10.1093/jeg/lbv006

Spin-offs : Why geography matters. / Baltzopoulos, Apostolos; Braunerhjelm, Pontus; Tikoudis, Ioannis.

In: Journal of Economic Geography, Vol. 16, No. 2, 2016, p. 273-303.

Research output: Contribution to JournalArticleAcademicpeer-review

TY - JOUR

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AB - 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 (RV), we conclude that the effect is confined to RV. 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.

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Baltzopoulos A, Braunerhjelm P, Tikoudis I. Spin-offs: Why geography matters. Journal of Economic Geography. 2016;16(2):273-303. https://doi.org/10.1093/jeg/lbv006