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- Title
From Russia with love: the impact of relocated firms on incumbent survival.
- Authors
Falck, Oliver; Guenther, Christina; Heblich, Stephan; Kerr, William R.
- 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.
- Subjects
GERMANY; MACHINE tool industry; MACHINERY industry; WORLD War II; 20TH century history
- Publication
Journal of Economic Geography, 2013, Vol 13, Issue 3, p419
- ISSN
1468-2702
- Publication type
Article
- DOI
10.1093/jeg/lbs035