Spinoffs or startups? The effects of spatial agglomeration

Despite the fact that spinoffs and geographical clustering are highly intertwined phenomena, to date no study analyzes how spatial agglomerations forces might affect the emergence of spinoffs relative to other startups. Using a sample of 3456 Italian manufacturing new ventures founded in the period 2005–2007, we investigate the effects of different forms of agglomeration forces on the likelihood of a new venture emerging as a spinoff rather than a startup. Our results show that industry-specific localization economies (captured by industrial district dummy and the number of incumbents at local level) tend to increase the chances of a new venture to emerge as a spinoff. Moreover, local-related variety has a positive and significant effect on the likelihood of a new venture to emerge as a spinoff, especially for those spinoffs from successful parents.