The Social Attachment to Place

Michael S. Dahl and Olav Sorenson

Many theories either implicitly or explicitly assume that individuals readily move to locations that improve their financial well being. Other forces, however, counteract these tendencies; for example, people often wish to remain close to family and friends. We introduce a methodology for determining how individuals weight these countervailing forces, and estimate how both financial incentives and social factors influence the probability of geographic mobility in the Danish population from 2002 to 2003. Our results suggest that individuals respond to opportunities for higher pay elsewhere, but that their sensitivity to this factor pales in comparison to their preferences for living near family and friends.

Paper has been accepted for Social Forces, February 25, 2010.

Home Sweet Home? Location Choice of Entrepreneurs and Performance of their Ventures

Michael S. Dahl and Olav Sorenson

We argue that social capital places strong constraints on an entrepreneur’s ability to found a firm in a region in which he or she does not have connections. We examine this thesis using comprehensive data on the Danish population and find evidence broadly consistent with this claim. Entrepreneurs tend to open businesses in regions in which they have deep roots (“home” regions). We further find that their ventures perform better (survive longer) when they locate in these home regions. The value of social capital moreover appears substantial, similar in magnitude to the value of having prior experience in the industry entered (i.e. human capital).

The Devil Dwells in the Tails: A Quantile Regression Approach to Firm Growth

Toke Reichstein, Michael S. Dahl, Bernd Ebersberger and Morten B. Jensen

This paper explores the firm growth rate distribution in a Gibrat’s Law context. The aim is to provide an empirical exploration of the determinants of firm growth. The work is novel in two respects. First, rather than limiting the analysis to focus on the conditional mean growth level, we investigate the complete shape of the distribution. Second, we show that the differences in the firm growth rate process between large and small firms are highly circumstantial. That industry dynamics have a substantial influence on the relationship between firm size and firm growth. The data used includes more than 9000 Danish firms from manufacturing, services and construction. We provide robust evidence indicating that firm growth studies should be less obsessed with explaining means and instead look to other parts of the firm growth rate distribution.

Are You Experienced? Prior Experience of Managers and the Survival of New Organisations

Michael S. Dahl and Toke Reichstein

This paper investigates the relationship between the experiences of managers and the likelihood of survival of their new firms. We take advantage of a comprehensive data-set covering the entire Danish labour market from 1980-2000. This is used to trace the activities of top ranked members of new firms prior to the founding and follow the fate of their firms after the founding.

Michael S. Dahl and Toke Reichstein (2007), “Are You Experienced? Prior Experience and the Survival of New Organizations“, Industry and Innovation. Vol. 14, No. 5, pp. 497-511. ISSN: 1366-2716. [DOI Link]

Associate Professor

As of August 1 2007, I have been promoted to be Associate Professor at my current Department. More specifically, I am now Associate Professor of Economics with special attention to Entrepreneurship and Regional Economics.

New DRUID Working Paper

A new DRUID Working Paper has been put online. It is paper co-authored with Toke Reichstein, Bernd Ebersberger and Morten Berg Jensen. We study how firm growth can be studied better with the use of quantile regression techniques. We estimate the growth pattern of 9,000 firms to illustrate this.

Read the paper here

New paper accepted for publication

My paper with Toke Reichstein, "Are You Experienced? Prior Experience and the Survival of New Firms", has been accepted for publication in the international peer-reviewed journal, Industry and Innovation. It analyses the relationship between general industry experience and the type of firms in which the experience is achieved and how this influences the survival probabilities of new firms. It is expected to be published in the journal in the December 2007 issue.

Michael S. Dahl and Toke Reichstein (2007), "Are You Experienced? Prior Experience and the Survival of New Organizations", Industry and Innovation. Vol. 14, No. 5, pp. 497-511. ISSN: 1366-2716.

Tietgen Gold Medal Award 2006

I am very much honored to receive the Tietgen Gold Medal Research Award 2006 for my Post-Doc research. The Tietgen Gold Medal is awarded to younger Post-Doc researchers, which have completed a significant degree of internationally published research within business and economics.

C. F. Tietgen was one of the great forces behind the industrial revolution in Denmark. He was behind a number of the greatest corporations at the time. Many of which still exist today, notably GN Store Nord, Danisco, Tuborg, DFDS and Burmeister & Wain.

The award is administred by the Danish Society for the Advancement of Business Education [Foreningen for Unge Handelsmænds Uddannelse] and its Danish Business Research Academy [Dansk Erhvervsforskningsakademi].

The Gold Medal is accompanied with 100,000 Danish Kroner (€13,500 / $16,500) to support a longer visit at an international university.

More information:

• About C. F. Tietgen (1828-1901) [in English] [in Danish here and here]
• The Tietgen Gold Medal Award [in Danish]
• Aalborg University's Press Release [in Danish]