TY  - JOUR
AU  - Hirakawa,Oana
AU  - Muendler,Marc-Andreas
AU  - Rauch,James E.
TI  - Employee Spinoffs and Other Entrants: Stylized Facts from Brazil
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15638
PY  - 2010
Y2  - January 2010
UR  - http://www.nber.org/papers/w15638
L1  - http://www.nber.org/papers/w15638.pdf
N1  - Author contact info:
Oana Hirakawa
Department of Economics
University of California, San Diego
9500 Gilman Dr, #0534
La Jolla, CA 92093-0534
E-Mail: otocoian@ucsd.edu

Marc-Andreas Muendler
Department of Economics, 0508
University of California, San Diego
9500 Gilman Drive
La Jolla, CA 92093-0508
Tel: 858/534-4799
Fax: 858/534-7040
E-Mail: muendler@ucsd.edu

James E. Rauch
Department of Economics
University of California, San Diego
La Jolla, CA 92093-0508
Tel: 858/534-2405
Fax: 858/534-7040
E-Mail: jrauch@weber.ucsd.edu
AB  - Using a comprehensive linked employer-employee database from Brazil for the period 1995-2001, we are able for the first time to compare firms founded as employee spinoffs to new firms without parents and to diversification ventures of existing firms entering a new industry. Employee spinoffs are defined either as the director/manager having moved from a parent in the same industry or as one-quarter of the employees having shifted from a common parent. Depending on definition, employee spinoffs account for between one-sixth and one-third of the new firms in Brazil’s private sector during this period. Regardless of definition, size at entry is larger for employee spinoffs than for new firms without parents but smaller than for diversification ventures of existing firms. Similarly, exit rates for employee spinoffs are less than for new firms without parents and comparable to those for diversification ventures of existing firms. These results suggest that we can think of some part of a firm’s productivity draw in the Jovanovic (1982) model as embodied in the firm’s employees and portable by them to a new firm.
ER  -