We explore the extent to which organizational capabilities are location-specific by studying the location choices and longevity of East German machine tool producers that relocated to West Germany after World War II. Relocating firms were similar in performance to experienced West German incumbents; they outperformed new entrants without prewar industry experience. This suggests they were able to build on capabilities acquired before the war. Even though relocating firms tended lo locate in industry agglomerations and in urbanized regions, we find no evidence suggesting that firm performance benefited from agglomeration economies.
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Buenstorf et al. (2010) studied this question.