The role of new firms for the development of clusters in Germany

Abstract

"The objective of this paper is to analyze the direct quantitative effects of new firms on the evolution of clusters. In the first part of our paper we will give an insight into a conceptual framework which discusses the role of entrepreneurship for the evolution of clusters. The second part of the paper shows the results of an empirical analysis about the relevance of startups and business creation for the economic development of three industrial clusters in Western Germany. The Munich Region is a growing cluster of medical technology whereas the surgical instruments cluster of Tuttlingen is a traditional centre of the medical technology industry. The cluster of textile and clothing industry in the region Neckar-Alb experiences a long-term declining process. The 'Establishment File' of the German Social Insurance Statistics is used as data source for entrepreneurial activities in Germany. The development of the number of start-ups and firm closures, new firm's survival, firm growth and accumulated gross employment effects of start-up cohorts will be analyzed in each cluster during the period 1984-2002. The results confirm that new firms play a crucial role for the growth of clusters whereas established firms are substantial for the labour market of clusters during the mature and declining stage." (Author's abstract, IAB-Doku) ((en))

Cite article

Köhler, S. & Otto, A. (2006): The role of new firms for the development of clusters in Germany. Paper submitted to the Annual Conference of the European Regional Science Association (ERSA). Saarbrücken, 30 p.