New firm survival: The interdependence between regional externalities and innovativeness

This paper provides evidence that the effect of agglomeration externalities on survival is moderated by the start-up's innovative behavior. It is shown that localization externalities are prevalent particularly in non-high-tech environments and unfold a positive influence on survival for less innovative companies, while their highly innovative counterparts do not benefit or even suffer from spatial concentration. On the contrary, highly innovative high-tech start-ups benefit from a diverse economic structure which enhances their likelihood for survival by fostering the emergence of beneficial inter-industry spill-overs.