Don't Stand So Close to Me: Foreign and Domestic Incumbents and New Business Births

Secil Hulya Danakol; Tomasz Mickiewicz; Tomasz Skica

doi:10.1093/jeg/lbag010

Don't Stand So Close to Me: Foreign and Domestic Incumbents and New Business Births

Secil Hulya Danakol^*
, Tomasz Mickiewicz
, Tomasz Skica

^*Corresponding author for this work

University of Information Technology and Management in Rzeszow

Research output: Contribution to journal › Article › peer-review

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Abstract

We examine the spatial pattern of agglomeration effects on firm births, distinguishing between domestic and foreign ownership among incumbent firms. Using data from Polish municipalities, our analysis considers both domestic and foreign firm births, capturing neighbourhood effects with spatial lags. We argue that the spatial pattern of agglomeration effects results from a combination of competition for resources and positive externalities, where the latter are mostly associated with foreign incumbents. We find that foreign incumbents in the neighbourhood have a stronger positive association with firm births than those in the focal municipality; in contrast, the reverse pattern applies to domestic incumbents.

Original language	English
Article number	lbag010
Number of pages	29
Journal	Journal of Economic Geography
Early online date	3 Mar 2026
DOIs	https://doi.org/10.1093/jeg/lbag010
Publication status	E-pub ahead of print - 3 Mar 2026

Bibliographical note

Copyright © The Author (2026). Published by Oxford University Press.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License
(https://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.

Funding

This research was conducted as part of the project ‘Planned versus implemented local development and entrepreneurship policies in Polish cities’ under a statutory grant from the University of Information Technology and Management in Rzeszow, Poland. We are also grateful to Aston Business School for the research grant that enabled us to acquire the data.

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10.1093/jeg/lbag010Licence: CC BY 4.0

Don't Stand So Close to Me - Foreign and Domestic Incumbents and New Business Births
Copyright © The Author (2026). Published by Oxford University Press. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
Final published version, 1.06 MBLicence: CC BY 4.0

Cite this

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abstract = "We examine the spatial pattern of agglomeration effects on firm births, distinguishing between domestic and foreign ownership among incumbent firms. Using data from Polish municipalities, our analysis considers both domestic and foreign firm births, capturing neighbourhood effects with spatial lags. We argue that the spatial pattern of agglomeration effects results from a combination of competition for resources and positive externalities, where the latter are mostly associated with foreign incumbents. We find that foreign incumbents in the neighbourhood have a stronger positive association with firm births than those in the focal municipality; in contrast, the reverse pattern applies to domestic incumbents.",

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Don't Stand So Close to Me: Foreign and Domestic Incumbents and New Business Births

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