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Survival of entrepreneurial firms : the role of agglomeration externalities

Tavassoli, Sam LU and Jienwatcharamongkhol, Viroj LU (2016) In Entrepreneurship and Regional Development 28(9-10). p.746-767
Abstract

This paper analyzes the role of various types of agglomeration externalities on the survival rate of entrepreneurial firms. In particular, we trace the population cohort of newly-established and self-employed Swedish firms in the Knowledge-Intensive Business Service sector in 1997 up to 2012 and investigate the role of Marshallian and Jacobian externalities on the survival of these firms. We find that only Jacobian externalities (diversity) is positively associated with the survival of entrepreneurial firms. Not all Jacobian externalities matter though. Only the higher the ‘related variety’ of the region in which an entrepreneurial firm is founded, the higher will be the survival chance of the firm, while ‘unrelated variety’ barely has... (More)

This paper analyzes the role of various types of agglomeration externalities on the survival rate of entrepreneurial firms. In particular, we trace the population cohort of newly-established and self-employed Swedish firms in the Knowledge-Intensive Business Service sector in 1997 up to 2012 and investigate the role of Marshallian and Jacobian externalities on the survival of these firms. We find that only Jacobian externalities (diversity) is positively associated with the survival of entrepreneurial firms. Not all Jacobian externalities matter though. Only the higher the ‘related variety’ of the region in which an entrepreneurial firm is founded, the higher will be the survival chance of the firm, while ‘unrelated variety’ barely has any significant correlation. The result is robust after controlling for extensive firm characteristics and individual characteristics of the founders. The main message here is: for a newly-established entrepreneurial firm, not only it matters who you are, but also where you are.

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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
agglomeration externalities, Entrepreneurial firms, region, related variety, survival analysis, unrelated variety
in
Entrepreneurship and Regional Development
volume
28
issue
9-10
pages
22 pages
publisher
Taylor & Francis
external identifiers
  • scopus:84992371790
  • wos:000390749800007
ISSN
0898-5626
DOI
10.1080/08985626.2016.1247916
language
English
LU publication?
yes
id
d5dfa4ae-37f6-4108-802b-5557a40a6e44
date added to LUP
2016-11-08 14:45:32
date last changed
2017-09-18 11:29:38
@article{d5dfa4ae-37f6-4108-802b-5557a40a6e44,
  abstract     = {<p>This paper analyzes the role of various types of agglomeration externalities on the survival rate of entrepreneurial firms. In particular, we trace the population cohort of newly-established and self-employed Swedish firms in the Knowledge-Intensive Business Service sector in 1997 up to 2012 and investigate the role of Marshallian and Jacobian externalities on the survival of these firms. We find that only Jacobian externalities (diversity) is positively associated with the survival of entrepreneurial firms. Not all Jacobian externalities matter though. Only the higher the ‘related variety’ of the region in which an entrepreneurial firm is founded, the higher will be the survival chance of the firm, while ‘unrelated variety’ barely has any significant correlation. The result is robust after controlling for extensive firm characteristics and individual characteristics of the founders. The main message here is: for a newly-established entrepreneurial firm, not only it matters who you are, but also where you are.</p>},
  author       = {Tavassoli, Sam and Jienwatcharamongkhol, Viroj},
  issn         = {0898-5626},
  keyword      = {agglomeration externalities,Entrepreneurial firms,region,related variety,survival analysis,unrelated variety},
  language     = {eng},
  month        = {10},
  number       = {9-10},
  pages        = {746--767},
  publisher    = {Taylor & Francis},
  series       = {Entrepreneurship and Regional Development},
  title        = {Survival of entrepreneurial firms : the role of agglomeration externalities},
  url          = {http://dx.doi.org/10.1080/08985626.2016.1247916},
  volume       = {28},
  year         = {2016},
}