Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108532
Authors: 
Changoluisa, Javier
Fritsch, Michael
Year of Publication: 
2014
Series/Report no.: 
Jena Economic Research Papers 2014-025
Abstract: 
We analyze the effect of new business formation on the productivity of incumbent manufacturing establishments. We obtain robust empirical evidence of productivity improvements that are due to the emergence of new businesses in the same industry, that is, on the output market. This effect is spatially limited to the respective region. Regional competition from new businesses on the input market and cross-industry effects are not related to incumbents' productivity changes. The effect that new competition has on incumbents is moderated by an incumbent's distance from the technological frontier; incumbents close to the frontier exhibit a more pronounced positive reaction.
Subjects: 
incumbent firms
New business formation
productivity
JEL: 
L26
D20
O12
Document Type: 
Working Paper

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