Dancing with wolves: A signaling model of De Novo Entrants' location choices

Yuval Deutsch, Sabrina Deutsch Salamon, Aviad A. Pe'er

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

We provide a novel explanation for why new entrepreneurial entrants choose to locate in clusters despite the intense competition within them. By developing a model of locating in a cluster as a signaling vehicle, we formally demonstrate that high-quality new firms bear the costs of an intensely competitive locale to credibly demonstrate their, otherwise unobserved, resources and capabilities strength. By separating themselves from those who cannot compete, the high-quality entrants are more likely to attract crucial stakeholders. The model integrates organizational economics and organizational capabilities- based literatures in entrepreneurial settings.

Original languageEnglish (US)
Title of host publicationVolume 3
Subtitle of host publicationSustainability, Ethics, and Entrepreneurship
PublisherWorld Scientific Publishing Co. Pte Ltd
Pages331-362
Number of pages32
Volume3-4
ISBN (Electronic)9789814733311
ISBN (Print)9789814733304
DOIs
StatePublished - Feb 1 2017

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)
  • Business, Management and Accounting(all)

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