Success Breeds Success Locally : A Tale of Incubator Firms


Inci, Eren


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URL: http://ub-madoc.bib.uni-mannheim.de/1455
URN: urn:nbn:de:bsz:180-madoc-14550
Document Type: Working paper
Year of publication: 2006
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: L26 R12 G20 D82 ,
Subject headings (SWD): Netzwerk , Unternehmenserfolg , Finanzierung / lokale , Unternehmensgründung
Keywords (English): agglomeration , entrepreneur , dispersion , innovatio , local financiers , networks , regional economies , project financing , signaling , start-up
Abstract: This paper focuses on the pre-establishment period of start-ups in industrial districts. The industrial architecture is what I call a "rationed agglomeration" in which some entrepreneurs gather around an established firm while other entrepreneurs in the same business stand alone. In a rationed agglomeration, I analyze the effects of relations between established firms, network entrepreneurs, and local financiers on the market prices of loans. I show that such relations improve the match of capital to ideas in the network even though the overall distribution of capital to ideas remains unchanged. This suggests that success breeds success in the networks of established firms. The existence of networks overturns the claim that there are no motives to engage in information gathering in a simple market regime with information asymmetries. In particular, I show that there are market incentives for established firms to decrease the information gap between network entrepreneurs and local financiers.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Inci, Eren (2006) Success Breeds Success Locally : A Tale of Incubator Firms. Open Access [Working paper]
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