Cluster externalities, firm capabilities, and the recessionary shock: how the macro-to-micro-transition shapes firm performance during stable times and times of crisis


Hundt, Christian ; Holtermann, Linus ; Steeger, Jonas ; Bersch, Johannes


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URL: https://madoc.bib.uni-mannheim.de/51275
URN: urn:nbn:de:bsz:180-madoc-512751
Document Type: Working paper
Year of publication: 2019
The title of a journal, publication series: ZEW Discussion Papers
Volume: 19-008
Place of publication: Mannheim
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: C33 , R11 , R58,
Keywords (English): Macro-to-micro-transition , combinative capabilities , agglomeration economies , cluster- level externalities , unrelated variety , related variety , macroeconomic regimes , Great Recession , economic resilience
Abstract: In this paper, we examine the macro-to-micro-transition of cluster externalities to firms and how it is affected by the macroeconomic instability caused by the recessionary shock of 2008/2009. Using data from 16,166 manufacturing and business services firms nested in 390 German regions, we employ within-firm regression techniques to estimate the impact of crosslevel interactions between firm- and cluster-level determinants on phase-related differences in firm performance between a pre-crisis (2004-2007) and a crisis period (2009-2011). The empirical results validate the existence of a macro-to-micro-transition that evolves best in the case of broad firm-level capabilities and variety-driven externalities. Furthermore, the results indicate that the transition strongly depends on the macroeconomic cycle. While the transition particularly benefits from a stable macroeconomic environment (2004-2007), its mechanisms are interrupted when being exposed to economic turmoil (2009-2011). Yet, the crisisinduced interruption of the transition is mainly restricted to the national recession in 2009. As soon as the macroeconomic pressure diminishes (2010-2011), we observe a reversion of the transmission mechanisms to the pre-crisis level. Our study contributes to the existing literature by corroborating previous findings that the economic performance of firms depends on a working macro-to-micro transition of external resources, which presupposes sufficient cluster externalities and adequate firm-level combinative capabilities. In contrast to previous studies on this topic, the transition mechanism is not modeled as time-invariant. Instead, it is coupled to the prevailing macroeconomic regime.

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Hundt, Christian ; Holtermann, Linus ; Steeger, Jonas ; Bersch, Johannes (2019) Cluster externalities, firm capabilities, and the recessionary shock: how the macro-to-micro-transition shapes firm performance during stable times and times of crisis. Open Access ZEW Discussion Papers Mannheim 19-008 [Working paper]
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