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Knowledge compensation in the German automobile industry

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In studies looking at firm survival over the industry life cycle knowledge is one of the most important determinants. Different kinds of knowledge, namely post-entry experience, pre-entry experience and knowledge acquired by innovative activity positively influence the survival chances. This article investigates how different kinds of knowledge are able to compensate each other. A statistical survival analysis is performed for the German automobile industry (1886–1939) which applies an estimation approach that links instrumental variables with the Cox regression. The results highlight that innovative activity is able to compensate for lacking post-entry experience, supporting Schumpeterian creative destruction.

Document Type: Research Article


Affiliations: 1: Department of Economics,Friedrich-Schiller-University Jena, Carl-Zeiss-Strasse 3D-07743 Jena, Germany 2: Department of Law and Economics,Darmstadt University of Technology, Residenzschloss, Marktplatz 15D-64283 Darmstadt, Germany 3: Jena Graduate School Human Behaviour in Social and Economic Change, \gt Friedrich-Schiller-University Jena, AccouchierhausJenergasse 8, D-07743,Jena, Germany

Publication date: September 1, 2011

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