IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa14p475.html
   My bibliography  Save this paper

Entrepreneurial Clusters and the Co-agglomeration of Related Industries: Spinouts in Portuguese Plastics and Molds

Author

Listed:
  • Rui Baptista
  • Carla Costa

Abstract

The success of ?entrepreneurial clusters' has led policymakers towards extensive efforts to seed local entrepreneurship. A particularly important determinant of the ?supply of entrepreneurs' are industry linkages within cities or regions. Indeed, studies consistently find that the most powerful predictor of future entrepreneurship for a city or region is the presence and strength of incumbent firms in the same or in related industries. This study examines how co-agglomeration (or collocation) of entrepreneurial firms in related industries influences cluster growth. Two types of effects are considered that may drive collocation: the inheritance of capabilities from local incumbents by spinout founders; and agglomeration benefits stemming from local access to supply-side spillovers. These effects are examined for the Portuguese molds and plastics industries. If agglomeration economies explain industry collocation, one would expect firms from related industries to collocate in the agglomerated region. Firms locating in the agglomerated region should perform better than firms located elsewhere, independently of their background. If heritage is the main force behind collocation, then spinouts will locate close to parent firms regardless of their region of origin. Spinouts from parent firms in the same or a related industry perform better than other startups. Our methodology is twofold. We first present a historical account of the evolution of the Portuguese molds and plastics industries, focusing on the location and genealogy of firms. Second, we conduct an econometric analysis of detailed data on firms, founders, and workers in the Portuguese molds and plastics industries covering the period 1986-2009. In order to test the predictions derived from agglomeration and organizational heritage theories, two main types of models are estimated, regarding: I. the probability of firms in molds and plastics industries cross-spawning entrants in those industries; II. the determinants of the performance of entrants, according to their geographical origin and founder background (i.e. spinouts vs. independent startups), using survival and sales growth models. Results suggest that the transmission of capabilities from parent firms to spinouts locating in the same region is the foremost driver of collocation and performance for the molds and plastic injection industries. The presence of the plastics industry has a positive impact on the molds industry but not the inverse, implying that while collocation with molds is not a requirement for the plastics industry to flourish, collocation with plastics is important for the molds industry.

Suggested Citation

  • Rui Baptista & Carla Costa, 2014. "Entrepreneurial Clusters and the Co-agglomeration of Related Industries: Spinouts in Portuguese Plastics and Molds," ERSA conference papers ersa14p475, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa14p475
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa14/e140826aFinal00475.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Guido Buenstorf & Steven Klepper, 2009. "Heritage and Agglomeration: The Akron Tyre Cluster Revisited," Economic Journal, Royal Economic Society, vol. 119(537), pages 705-733, April.
    2. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
    3. Aaron Chatterji & Edward Glaeser & William Kerr, 2014. "Clusters of Entrepreneurship and Innovation," Innovation Policy and the Economy, University of Chicago Press, vol. 14(1), pages 129-166.
    4. Glenn Ellison & Edward L. Glaeser & William R. Kerr, 2010. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," American Economic Review, American Economic Association, vol. 100(3), pages 1195-1213, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kim, Jungho & Kollmann, Trevor & Palangkaraya, Alfons & Webster, Elizabeth, 2022. "Does local technological specialisation, diversity and dynamic competition enhance firm creation?," Research Policy, Elsevier, vol. 51(7).
    2. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 349-404, Elsevier.
    3. Giulia Faggio & Olmo Silva & William C Strange, 2020. "Tales of the city: what do agglomeration cases tell us about agglomeration in general? [The anchor tenant hypothesis: exploring the role of large, local, R&D-intensive firms in regional innovation ," Journal of Economic Geography, Oxford University Press, vol. 20(5), pages 1117-1143.
    4. Luis Cabral & Zhu Wang & Daniel Yi Xu, 2018. "Competitor, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 30, pages 1-29, October.
    5. Chuantao Cui & Leona Shao-Zhi Li, 2024. "More but not better: Career incentives of local leaders and entrepreneurial entry in China," Working Papers 202417, University of Macau, Faculty of Business Administration.
    6. Delgado, Mercedes & Porter, Michael E. & Stern, Scott, 2014. "Clusters, convergence, and economic performance," Research Policy, Elsevier, vol. 43(10), pages 1785-1799.
    7. Cui, Chuantao & Li, Leona Shao-Zhi, 2023. "Trade policy uncertainty and new firm entry: Evidence from China," Journal of Development Economics, Elsevier, vol. 163(C).
    8. William R. Kerr & Frederic Robert-Nicoud, 2020. "Tech Clusters," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 50-76, Summer.
    9. Faggio, G. & Silva, O. & Strange, W.C., 2019. "Tales of the City: What Do Agglomeration Cases Tell Us About Agglomeration in General?," Working Papers 19/10, Department of Economics, City University London.
    10. Emma Howard & Carol Newman & Finn Tarp, 2016. "Measuring industry coagglomeration and identifying the driving forces," Journal of Economic Geography, Oxford University Press, vol. 16(5), pages 1055-1078.
    11. repec:bof:bofrdp:urn:nbn:fi:bof-201512111472 is not listed on IDEAS
    12. Carla Costa & Rui Baptista, 2023. "Knowledge inheritance and performance of spinouts," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(1), pages 29-55, March.
    13. Deltas, George & De Silva, Dakshina G. & McComb, Robert P., 2019. "Spatial persistence of agglomeration in software publishing," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 544-565.
    14. repec:zbw:bofrdp:urn:nbn:fi:bof-201512111472 is not listed on IDEAS
    15. Christoph Stich & Emmanouil Tranos & Max Nathan, 2023. "Modeling clusters from the ground up: A web data approach," Environment and Planning B, , vol. 50(1), pages 244-267, January.
    16. Zhu Wang & Daniel Yi Xu & Luis Cabral, 2012. "The Determinants of Geographic Concentration of Industry: A Quantitative Analysis," 2012 Meeting Papers 615, Society for Economic Dynamics.
    17. Russell Golman & Steven Klepper, 2016. "Spinoffs and clustering," RAND Journal of Economics, RAND Corporation, vol. 47(2), pages 341-365, May.
    18. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 349-404, Elsevier.
    19. repec:zbw:bofrdp:2015_027 is not listed on IDEAS
    20. Zheng, Liang & Zhao, Zhong, 2017. "What drives spatial clusters of entrepreneurship in China? Evidence from economic census data," China Economic Review, Elsevier, vol. 46(C), pages 229-248.
    21. Bahar, Dany & Rosenow, Samuel & Stein, Ernesto & Wagner, Rodrigo, 2019. "Export take-offs and acceleration: Unpacking cross-sector linkages in the evolution of comparative advantage," World Development, Elsevier, vol. 117(C), pages 48-60.
    22. Hyuk-Soo Kwon & Jihong Lee & Sokbae Lee & Ryungha Oh, 2022. "Knowledge spillovers and patent citations: trends in geographic localization, 1976–2015," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 31(3), pages 123-147, April.
    23. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311, February.

    More about this item

    Keywords

    Clusters; Spinouts; Regional development; Agglomeration Economies; Organizational Heritage;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa14p475. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.