in a simple model that the perceived degree of past differentiation affects future incentives. We then study the impact … of differentiation empirically with a large panel data set spanning many firms in one industry. On average, stronger … differentiation has a substantial positive effect on performance. This effect is larger on higher hierarchical levels. But …

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 …