Paper to be presented at the DRUID Summer Conference 2004 on INDUSTRIAL DYNAMICS, INNOVATION AND DEVELOPMENT Elsinore, Denmark, June 14-16, 2004 Theme E Entrepreneurship, Innovation and Growth Borrowing from Neighbors: The Location Choice of Entrepreneurs Barak S. Aharonson, Joel A.C. Baum and Maryann P. Feldman Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 CANADA Rev. Tuesday, May 18, 2004 Abstract The logic of industrial clustering suggests that new entrants will be attracted by the potential of knowledge spillovers from existing firms who work in the same technological specialization. Using data on the location of firms in the Canadian Biotechnology Industry between 1992 and 2000, this paper explores the influence of agglomerative forces on the entrepreneur’s founding location. The findings suggest that entrepreneurs locate strategically in industrial clusters in order to benefit from knowledge spillovers from firms in the same technological specialization. A few keywords: Biotechnology, industrial clustering, knowledge spillovers JEL - code(s): R30 and 031