Many firms start as spinoff companies having the advantage of inheriting organizational routines of the parent firm. By constructing the genealogical structure of parent-spinoff relationships, one can analyze the effects of routine replication on firm success. Based on a unique dataset on the global fashion design industry we find that spinoffs outperform other firms and that spinoffs inherit parent success. We supplement this genealogical perspective with an analysis of localization economies and migration flows, which are shown to have an insignificant effect on firm success. We conclude that the local replication of routines through spinoffs caused the clustering of fashion design in a handful of cities around the world.
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