We study whether entrepreneurial spinoffs are important drivers of
industry dynamics. More precisely, we investigate whether the
quality of jobs in spinoff entrepreneurs are higher than for other
entrepreneurs. We distinguish spinoff firms by different types and
distinguish between growing and declining industry-region clusters.
We find that spinoffs on average have higher wages, are more skill
intensive, have higher sales per worker and are more productive
than non-spinoff entrepreneurial firms. The differences are more
pronounced in growing clusters. The results even hold when we
control for worker heterogeneity and industry and region clusters
characteristics. An important feature of the analysis is that we
measure the entrepreneur as the organic new firm. By organic new
firm, we mean new firms that are not the result of restructurings
or organising existing or additional activities in a formally new
firm.
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