EXTERNAL ENTRY AND THE EVOLUTION OF CLUSTERS IN THE BIOTECHNOLOGY INDUSTRY IN CANADA.

In this paper, I explore inter-related processes in the geographic agglomeration of industry: that of entry into, and the survival and growth of firms in, industry clusters. Building on recent work in economic geography, evolutionary economics, and international business, I examine how firms that enter from outside a region alter the knowledge and opportunity structure for potential entrants and indigenous incumbents in that region. In particular, I examine the short and long run effects of both greenfield and acquisition entry on entrepreneurial entry, as well as on the exit and growth of indigenous incumbents in regions. I use a comprehensive dataset of all firms in the Canadian biotech industry between 1978 and 2002 to study the dynamic effects within all regions that have experienced an external entry. This work has both managerial and public policy implications. [ABSTRACT FROM AUTHOR]