Survival of Spinoffs and Other Startups: First Evidence for the Private Sector in Germany, 1976-2008

41 Pages Posted: 23 Aug 2013

See all articles by Daniel Fackler

Daniel Fackler

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics

Claus Schnabel

University of Erlangen-Nuremberg; IZA Institute of Labor Economics

Abstract

Using a 50 percent sample of all establishments in the German private sector, we report that spinoffs are larger and initially employ more skilled and more experienced workers than other startups. Controlling for these and other differences, we find that spinoffs are less likely to exit than other startups. We show that in West and East Germany and in all sectors investigated pulled spinoffs (where the parent company continues after they are founded) generally have the lowest exit hazards, followed by pushed spinoffs (where the parent company stops operations). The difference between both types of spinoffs is particularly pronounced in the first three years. Contrary to expectations, intra-industry spinoffs are not found to have lower exit hazards in our sample.

Keywords: spinoffs, startups, firm exits, Germany

JEL Classification: L2, D22, M13, C41

Suggested Citation

Fackler, Daniel and Schnabel, Claus, Survival of Spinoffs and Other Startups: First Evidence for the Private Sector in Germany, 1976-2008. IZA Discussion Paper No. 7542, Available at SSRN: https://ssrn.com/abstract=2314837 or http://dx.doi.org/10.2139/ssrn.2314837

Daniel Fackler (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics ( email )

Lange Gasse 20
Nuernberg, D-90403
Germany

Claus Schnabel

University of Erlangen-Nuremberg ( email )

Institut für Wirtschaftsforschung
Lange Gasse 20
D-90403 Nuernberg
Germany
+49 911 5302 330 (Phone)
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IZA Institute of Labor Economics

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Germany

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