Incumbent innovation and entry by spinoff

Arbeitspapier

This paper takes a different perspective toward the escape entry incentive of incumbent firms to innovate. New entrants spawned from incumbents are not necessarily a threat; they can complement incumbents' production by commercializing knowledge incumbents are not willing or able to exploit. Accordingly, incumbent innovation determines exploitable knowledge externalities for spinoffs while, at the same time, spinoffs are expected to influence incumbent innovation. To overcome this problem of endogeneity, we apply an IV approach to analyze a rich industry-level dataset (19872000) for Germany. We find evidence that entry by spinoffs does, indeed, have a positive impact on incumbent innovation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Jena Economic Research Papers ; No. 2008,083

Classification and Topics

• Classification: Wirtschaft ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices ; New Firms; Startups
• Subject: Innovation ; entry ; spinoff ; Betriebsaufspaltung ; Unternehmensgründung ; Innovationswettbewerb ; Theorie ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Falck, Oliver ; Heblich, Stephan
• Event: Veröffentlichung
• (who): Friedrich Schiller University Jena and Max Planck Institute of Economics
• (where): Jena
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/31754
• Last update: 10.03.2025, 11:41 AM CET