Dear Colleagues,
Our next virtual seminar in the Entrepreneurship and Innovation Policy Research series is Wednesday, March 11 from 11:00-12:00 ET. Anna Lamin (Northeastern University) - will present - "How Technological Shifts Affect Co-location Decisions: Evidence from the Bangalore Software Industry" Abstract is below. Click the link HERE to register for the March 11th seminar.
We hope you join us!
- Tim Folta (UCONN), Maryann Feldman (ASU), and Supradeep Dutta (Rutgers U)
Abstract: Emerging technologies often reshape industry dynamics, prompting some organizations to adapt while others continue operating within established structures. In this study, we examine how such technological shifts influence the location choices of new entrants. Building on research in agglomeration and technological change, we show that before the introduction of a major technological upgrade, new entrants tended to locate in areas populated by firms organized around long-standing industry practices. Following the introduction of the new technology, however, this pattern weakened, suggesting a reorientation in the factors guiding entry decisions. To investigate this empirically, we combine detailed data on the Indian software industry in Bangalore with information on H‑1B visa usage, which allows us to identify domestic firms engaged in large‑scale outsourcing activity. Our findings indicate that, prior to the rollout of 3G wireless spectrum, locations with a high concentration of such firms were particularly attractive to new entrants. After the technological shift, this locational pull declined significantly. Overall, the study highlights how technological transitions can alter the spatial logic of industry evolution, shaping agglomeration patterns and influencing where new firms choose to establish themselves.
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