Christina Guenther

From Russia with Love: The Impact of Relocated Firms on Incumbent Survival

We identify the impact of local firm concentration on incumbent performance in a historic setting that has quasi-experimental characteristics. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet-occupied zone to prevent expropriation. We show that the regional location decisions of these firms upon moving to western Germany were driven by non-economic factors and heuristics rather than existing industrial conditions. Relocating firms increased the likelihood of incumbent failure in destination regions, a pattern that differs sharply from new entrants. We further provide evidence that these effects are due to increased competition for local resources.

Persistence and Change of Regional Industrial Activities: The Impact of Diversification in the German Machine Tool Industry

The paper investigates the stability and change of regional economic activities in the long run. As the unit of analysis, we selected the machine tool industry in West Germany for the years 1953–2002. We spot a strong variance in the activities between different regions. These differences are relatively stable over time, and the regional activities are rather path-dependent. Nevertheless, the paper also identifies changes in the level of activities. As the main driving factors for these developments, we examine the effect of changing regional degrees of diversification over time. We find that those regions which generally broaden their scope of activities have a higher likelihood to grow than regions which are specializing. Furthermore, diversification into totally new technological and product fields is only beneficial under specific circumstances based on technological and market developments. Hence, in most cases, a broad diversification is superior to one focusing on new state-of-the-art technological fields.

Heroes today - but what about tomorrow: Gazelles and their long-term performance

Young high-growth firms, or gazelles, have been investigated predominantly with respect to their outstanding short-term performance. The paper at hand adopts a different approach by analyzing the long-term performance of such firms to shed light on the sustainability of these job-creating machines. Using the Danish Integrated Database for Labour Market Research, we find that former gazelles are not able to sustain their headstart in terms of performance in the long run. We demonstrate that gazelles are often outperformed by initially slower growing competitors, as high initial growth negatively affects a firm’s long-term survival. We also find that high-growth start-ups ultimately achieve lower employment growth and higher employee turnover. We explain these counterintuitive findings by arguing that an initial period of rapid employment growth impedes the emergence of a stable and efficient routine structure within the newly founded venture if expansion is undertaken too hastily. In turn, this impediment decreases these firms’ long-term performance, as the initial set of structures and routines or the lack thereof has a long-lasting effect on the organization’s development. Acknowledgments: This project was funded by the Danish Social Science Research Council at the Danish Agency for Science, Technology and Innovation. We are grateful for discussions with Michael S. Dahl, Olav Sorenson, Michael Hannan, Glenn Carroll, and seminar participants at the Stanford Graduate School of Business and Scandinavian Consortium for Organizational Research.

When Differences Make a Difference.

This study makes a case for the contingency perspective on turnover intentions of em-ployees across ranks of employment and organizational characteristics. We investigate the rela-tionship between ...