|Appears in Collections:||Economics Journal Articles|
|Peer Review Status:||Refereed|
|Title:||From Russia with love: the impact of relocated firms on incumbent survival|
Kerr, William R
|Citation:||Falck O, Guenther C, Heblich S & Kerr WR (2013) From Russia with love: the impact of relocated firms on incumbent survival, Journal of Economic Geography, 13 (3), pp. 419-449.|
|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.|
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