Ebook The impact of regional and functional integration on the post-entry performance: of knowledge intensive business service firms
This paper gives an empirical analysis of the determinants of post-entry performance of newly founded knowledge intensive business service firms (KIBS) using a newly created firm micro-level dataset. Special emphasis is met on the role of a KIBS functional and regional integration on its post-entry growth. In current research, notwithstanding the richness of studies about KIBS and about entrepreneurship, there is a lack of empirical studies linking these two fields of research as well as a lack of studies using firm micro data for an analysis of the determinants of post-entry growth in the KIBS sector.
First, studies about KIBS are predominantly concerned with the role of KIBS (and services in general) for economic development and change, with the nature and significance of innovation processes in the service sector, or with the inter-firm relationships of KIBS. Entrepreneurship in the KIBS sector is hardly ever discussed. This is all the more astonishing as the emergence of the KIBS sector is a very recent economic phenomenon and as foundations of new companies play a central role.
Second, entrepreneurship research has undergone a somewhat inflationary development within the last few years, at least in the European context. However, although it is well known that the service sector accounts for a considerable part of economic development and change and thus for firm foundations (Almus et al. 2001), there is an overwhelming bias in existing entrepreneurship research towards the manufacturing sector (e.g. Wagner 1994, Honjo 2004, Strotmann 2002, 2003) which is primarily the result of a lack of suitable micro data for the service sector. Moreover, a lot of studies examining the post-entry performance of newly founded firms do this either by studying sets of highly aggregated factors or on the basis of very small samples using qualitative methods. The only examples explicitly examining newly founded KIBS are – to the best of our knowledge – the publications presented by Almus et al. (2001) and by Santarelli/Piergiovanni (1995) which are based – in contrast to our study – on aggregate regional data. For a deeper understanding of the ongoing processes in the KIBS sector, and certainly with regard to its obvious importance, it seems reasonable to gain deeper insights into the determinants of a KIBS post-entry growth.
We therefore have conducted an empirical study examining the determinants of the development of newly founded KIBS. In autumn 2003, 547 firm founders in three German metropolitan regions were asked about the process of their firm’s foundation, the development of their firm, as well as about co-operation, market, knowledge, and proximity.
This paper is organised as follows: In section 2, the conceptual framework will be presented in three paragraphs: the characteristics of KIBS, the determinants of the post-entry performance of newly founded firms, and the special role of functional and regional integration for the development of start-ups. Dataset and methodology will be outlined in section 3. The empirical results are the content of section 4. Section 5 concludes.
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