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The Determinants of Regional Variation in New Firm Formation

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Author Info
Catherine Armington
Zoltan J. Acs

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Abstract

While much of the literature on new firm formation in the 1980s was motivated by high levels of unemployment, much of the focus on new firm start-ups today is motivated by high technology. Using a new database we examine the role of human capital, training and education, and entrepreneurial environment on new firm formation. We find significant differences in new firm formation rates from industrial regions to technologically progressive regions. Variations in firm birth rates are explained by industrial density, population and income growth. These results are consistent with thick labour markets and localized knowledge spillovers. Alors que le chômage constituait le principal moteur de la documentation sur la création d'entreprise dans les années 80, de nos jours c'est plutôt la nouvelle technologie qui en est le moteur. A partir d'une nouvelle base de données, cet article cherche à examiner le rôle du capital humain, de la formation et de l'éducation, et du milieu propice à la création d'entreprise. Il s'avère d'importants écarts dans les taux de création d'entreprise entre les régions industrielles et les régions plus à la pointe de la technologie. La variation du taux de création d'entreprise s'explique par la densité industrielle, la démographie et la croissance du revenu. Ces résultats-là correspondent aux notions de marchés du travail forts et de retombées des connaissances localisées. Während in den achtziger Jahren ein Großteil der Literatur über die Gründung neuer Firmen durch den hohen Grad der Erwerbslosigkeit veranlaßt worden war, verdankt sie heute das Interesse an Firmengründungen hauptsächlich der Hochtechnologie. Mit Hilfe einer neuen Datenbank werden die Einflüsse von Menschenkapital, Ausbildung und Erziehung und einer unternehmerfreundlichen Umwelt auf Firmengründungen untersucht. Es werden signifikante Unterschiede in den Raten neuer Firmengründungen in Industriegebieten und technologisch fortschrittlichen Gebieten festgestellt. Schwankungen in Firmengründungsraten finden ihre Erklärung in Industriedichte, Bevölkerung und Einkommensanstieg. Diese Ergebnisse stimmen mit starken Arbeitsmärkten und örtlich beschränkter Verbreitung von Kenntnisen überein.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Regional Studies.

Volume (Year): 36 (2002)
Issue (Month): 1 (February)
Pages: 33-45
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Handle: RePEc:taf:regstd:v:36:y:2002:i:1:p:33-45

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Keywords: New Firm Formation Spillovers Unemployment Spatial Variation

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March. [Downloadable!] (restricted)
    Other versions:
  2. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June. [Downloadable!] (restricted)
  3. Anselin, Luc & Varga, Attila & Acs, Zoltan, 1997. "Local Geographic Spillovers between University Research and High Technology Innovations," Journal of Urban Economics, Elsevier, vol. 42(3), pages 422-448, November. [Downloadable!] (restricted)
  4. Per Davidsson & Leif Lindmark & Christer Olofsson, 1994. "New Firm Formation and Regional Development in Sweden," Regional Studies, Taylor and Francis Journals, vol. 28(4), pages 395-410, July. [Downloadable!] (restricted)
  5. Krugman, Paul, 1998. "Space: The Final Frontier," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 161-74, Spring. [Downloadable!] (restricted)
  6. David Audretsch & Michael Fritsch, 1994. "The Geography of Firm Births in Germany," Regional Studies, Taylor and Francis Journals, vol. 28(4), pages 359-365, July. [Downloadable!] (restricted)
  7. Paul R. Krugman, 1991. "First Nature, Second Nature, and Metropolitan Location," NBER Working Papers 3740, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Acs, Zoltan J & Audretsch, David B & Feldman, Maryann P, 1992. "Real Effects of Academic Research: Comment," American Economic Review, American Economic Association, vol. 82(1), pages 363-67, March. [Downloadable!] (restricted)
  9. Krugman, Paul, 1991. "History and Industry Location: The Case of the Manufacturing Belt," American Economic Review, American Economic Association, vol. 81(2), pages 80-83, May. [Downloadable!] (restricted)
  10. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  11. Bernard Guesnier, 1994. "Regional Variations in New Firm Formation in France," Regional Studies, Taylor and Francis Journals, vol. 28(4), pages 347-358, July. [Downloadable!] (restricted)
  12. Acs, Zoltan J & Audretsch, David B & Feldman, Maryann P, 1994. "R&D Spillovers and Recipient Firm Size," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 336-40, May. [Downloadable!] (restricted)
  13. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Anyadike-Danes, Michael & Hart, Mark & O'Reilly, Maureen, 2002. "Watch that Space! The County Hierarchy in Firm Births and Deaths in the UK 1980-1999," Working Papers NIERC. 73, Economic Research Institute of Northern Ireland. [Downloadable!]
  2. Brixy, Udo & Grotz, Reinhold, 2006. "Regional patterns and determinants of new firm formation and survival in western Germany," IAB Discussion Paper 200605, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  3. Wagner, Joachim, 2004. "Are Young and Small Firms Hothouses for Nascent Entrepreneurs? Evidence from German Micro Data," IZA Discussion Papers 989, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Fridh, Ann-Charlotte, 2003. "The Exit of Pharmacia and Regional Growth," Ratio Working Papers 22, The Ratio Institute. [Downloadable!]
  5. Nyström, Kristina, 2005. "Determinants of Regional Entry and Exit in Industrial Sectors," Working Paper Series in Economics and Institutions of Innovation 33, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
  6. Michael Fritsch & Pamela Mueller, 2005. "The Persistence of Regional New Business Formation-Activity over Time – Assessing the Potential of Policy Promotion Programs," ERSA conference papers ersa05p706, European Regional Science Association. [Downloadable!]
    Other versions:
  7. Sander Wennekers & André van Stel & Roy Thurik & Paul Reynolds, 2005. "Nascent entrepreneurship and the level of economic development," Discussion Papers on Entrepreneurship, Growth and Public Policy 2005-14, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
    Other versions:
  8. Wagner, Joachim, 2004. "What a Difference a Y Makes: Female and Male Nascent Entrepreneurs in Germany," IZA Discussion Papers 1134, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  9. Reinhold Grotz & Udo Brixy, 2003. "Regional Patterns and Determinants of the Success of New Firms in Western Germany," ERSA conference papers ersa03p270, European Regional Science Association. [Downloadable!]
  10. Zoltan Acs & Pamela Mueller, 2006. "Employment effects of business dynamics: Mice, Gazelles and Elephants," Discussion Papers on Entrepreneurship, Growth and Public Policy 2006-23, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
    Other versions:
  11. Kristina Nyström, 2007. "An industry disaggregated analysis of the determinants of regional entry and exit," The Annals of Regional Science, Springer, vol. 41(4), pages 877-896, December. [Downloadable!] (restricted)
  12. Sutaria, Vinod & Hicks, Donald, 2002. "The determinants of new firm formation dynamics," ERSA conference papers ersa02p399, European Regional Science Association. [Downloadable!]
  13. Zoltan J. Acs & Monika I. Megyesi, 2007. "Creativity and Industrial Cities: A Case Study of Baltimore," Discussion Papers on Entrepreneurship, Growth and Public Policy 2007-08, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
    Other versions:
  14. Zoltan J. Acs & David Audretsch & Ronnie J. Phillips & Sameeksha Desai, 2007. "The Entrepreneurship-Philanthropy Nexus: Nonmarket Source of American Entrepreneurial Capitalism," Jena Economic Research Papers in Economics 2007-025, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek. [Downloadable!]
    Other versions:
  15. Zoltan J Acs & Catherine Armington, 2003. "Endogenous Growth and Entrepreneurial Activity in Cities," Working Papers 03-02, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  16. Whitney Peake & Maria Marshall, 2007. "Getting the Most Bang for the Buck: An Analysis of States’ Relative Efficiencies in Promoting the Birth of Small Firms," The Office of Advocacy Small Business Working Papers 07wpmm, U.S. Small Business Administration, Office of Advocacy. [Downloadable!]
  17. Zoltan J Acs & Catherine Armington, 2003. "The Geographic Concentration of New Firm Formation and Human Capital: Evidence from the Cities," Working Papers 03-05, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  18. Pedro Moyano & Beatriz Fariña & Guillermo Aleixandre & Olga Ogando, 2005. "Enterprise creation at a local scale - determining factors in the case of municipalities in Castilla y León," ERSA conference papers ersa05p516, European Regional Science Association. [Downloadable!]
  19. Lawrence A. Plummer, 2007. "The Spatial Dynamic Between Established Firms and Entrants," The Office of Advocacy Small Business Working Papers 07lp, U.S. Small Business Administration, Office of Advocacy. [Downloadable!]
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This page was last updated on 2008-8-28.


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