Discussion paper

DP4949 Do Locational Spillovers Pay? Empirical Evidence from German IPO Data

This study examines the impact locational spillovers have on firm performance. Based on a uniquely created dataset consisting of high-technology start-ups publicly listed in Germany, this paper tests the proposition of locational spillovers positively affecting firm performance, as measured by abnormally high profits on the stock market. The results provide evidence that geographic proximity and university spillovers are complementary determinants of firm performance. While neither geographic proximity nor academic research spillovers alone can explain firm performance, a combination of both factors results in significant higher stock market performance. The results also show academic spillovers are heterogeneous in their impact depending on the type. In particular, spillovers from social sciences have a different impact on firm performance than do spillovers from natural science.


Audretsch, D and E Lehmann (2005), ‘DP4949 Do Locational Spillovers Pay? Empirical Evidence from German IPO Data‘, CEPR Discussion Paper No. 4949. CEPR Press, Paris & London. https://cepr.org/publications/dp4949