We compare real wage differences between centralized and peripheral areas and highly centralized and peripheral areas using vast information of German administrative data that contains more than 2.8 Million individuals and 660,000 firms. We provide substantial empirical evidence that most of the...

Using a linked employer-employee data set for Germany, this paper analyses wage setting in a cohort of newly founded and other establishments from 1997 to 2001. While theory provides alternative explanations for higher or lower wages in newly founded firms, we show empirically that start-ups...