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Creativity and Entrepreneurship: A Regional Analysis of New Firm Formation

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Author Info
Sam Youl Lee
Richard Florida
Zoltan Acs

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Abstract

Lee S. Y., Florida R. and Acs Z. J. (2004) Creativity and entrepreneurship: a regional analysis of new firm formation, Regional Studies 38 , 879-891. Understanding the factors that promote or mitigate new firm birth is crucial to regional economic development efforts, since a high level of new firm creation significantly contributes to regional economic vitality and is a major signal of a dynamic economy. The literature suggests that various factors such as unemployment, population density/ growth, industrial structure, human capital, the availability of financing and entrepreneurial characteristics significantly influence regional variation in new firm birth rates. This study explores whether connections exist among regional social characteristics, human capital and new firm formation. It argues that social diversity and creativity have a positive relationship with new firm formation. Building on the contributions of urbanist Jane Jacobs, Lee, Florida and Gates (2002) showed that social diversity and human capital have positive and significant relationships with regional innovation production measured by per capita patent production. While it is well known that regional human capital stock positively affects new firm formation rates, little attention has been paid to the interaction among social diversity, human capital and entrepreneurship. It is argued that low barriers of entry into the regional labour market (as exhibited in part by the presence of a diverse population) and diverse culture facilitate the influx of a particular kind of human capital that promotes innovation and accelerates information flow, leading to the higher rate of new firm formation. The empirical results support the main hypothesis. By using Longitudinal Establishment and Enterprise Microdata (LEEM), the hypothesis is tested at the Metropolitan Statistical Areas (MSAs) level as well as at the Labor Market Areas (LMAs) level. New firm formation is strongly associated with cultural creativity when controlled for the variables suggested in the literature. Firm formation is positively and significantly associated with the Diversity Index but insignificantly with the Melting Pot Index. The results suggest that one needs to pay attention to the social habitat of a region to boost a regional entrepreneurial dynamics. Lee S. Y., Florida R. et Acs Z. J. (2004) La créativité et l'esprit d'entreprise: une analyse régionale de la création d'entreprise, Regional Studies 38 , 879-891. Comprendre les facteurs favorables ou défavorables à la création d'entreprise joue un rôle capital dans le développement économique régional, parce qu'un taux de création élevé contribue de façon très significative à la vitalité économique régionale et constitue un clignotant majeur d'une économie dynamique. La documentation laisse supposer que divers facteurs, tels le chômage, la densité/la croissance de la population, la structure industrielle, le capital humain, la disponibilité du financement, et les caractéristiques de l'esprit d'entreprise influencent sensiblement la variation régionale des taux de création d'entreprise. Cette étude cherche à examiner si, oui ou non, on peut établir une corrélation entre des caractéristiques sociales régionales, le capital humain, et la création d'entreprise. On soutient que la diversité sociale et la créativité sont en corrélation étroite et significative avec la création d'entreprise. Le développement des contributions de l'urbaniste Jane Jacobs, Lee, Florida et Gates (2002) a démontré que la diversité sociale et le capital humain sont en corrélation étroite et significative avec l'innovation régionale, mesurée en termes du nombre de brevets détenus par tête. Alors qu'il est reçu que le stock du capital humain influence de façon positive les taux de création d'entreprise, on prête peu d'attention à l'interaction entre la diversité sociale, le capital humain, et l'esprit d'entreprise. On soutient que les barrières à l'insertion sur le marché du travail régional peu élevées (ce qui laisse supposer jusqu'à un certain point la présence d'une population diverse) et une culture diverse facilitent l'afflux d'un capital humain particulièrement propice à l'innovation et qui accélère le flux d'information, ce qui amène à un taux de création d'entreprise plus élevé. Les résulats empiriques viennent à l'appui de l'hypothèse principal avancé. A partir des données longitudinales et microéconomiques sur les entreprises (Longitudinal Establishment and Enterprise Microdata - LEEM), on cherche à tester l'hypothèse sur le plan métropolitain (Metropolitan Statistical Areas - MSAs) ainsi qu'au niveau des marchés du travail locaux (Labour Market Areas - LMAs). Il s'avère que la création d'entreprise est en corrélation étroite avec la créativité culturelle, une fois contrôlée pour les variables proposées dans la documentation. La création d'entreprise est en corrélation étroite et significative avec l'indice Diversité mais en corrélation faible avec l'indice Melting- pot. Les résultats semblent indiquer qu'il faut faire attention à l'habitat social d'une région pour donner de l'impulsion à la dynamique régionale entrepreneuriale. Lee S. Y., Florida R. und Acs Z. J. (2004) Kreativität und Unternehmertum: eine Regionalanalyse der Gründung neuer Firmen, Regional Studies 38 , 879-891. Verständnis der Faktoren, welche die Gründung neuer Firmen fördern oder erleichtern, ist unerläßlich für die Bemühungen um regionale Wirtschaftentwicklung, da ein höherer Anteil neuer Firmengründungen wesentlich zur regionalen Wirtschaftsentwicklung beiträgt, und ein Hauptanzeichen einer dymanischen Wirtschaft darstellt. Die Literatur deutet darauf hin, daß verschiedene Faktoren, wie Erwerbslosigkeit, Bevölkerungsdichte/wachstum, Industriestruktur, Menschenkapital, Vorhandensein von Finanzierungsmöglichkeiten und unternehmerische Eigenschaften signifkante regionale Unterschiede bei der Rate neuer Firmengründungen nach sich ziehen. In dieser Studie wird untersucht, ob Verbindungen zwischen regionalen gesellschaftlichen Eigenschaften, Menschenkapital und der Gründung neuer Firmen bestehen. Es wird die These aufgestellt, daß gesellschaftliche Verschiedenartigkeit und Kreativität ein positives Verhältnis zur Gründung neuer Firmen aufweisen. Gestützt auf Beiträge der Urbanistin Jane Jacobs, zeigten Lee, Florida und Gates (2002), daß gemessen an pro-Kopf -patentanmeldung, gesellschaftliche Vielfalt und Menschenkapital positive und signifikante Beziehungen zu regionaler Innovationsproduktion aufweisen. Obschon es wohlbekannt ist, daß Bestände regionalen Menschenkapitals die Rate neuer Firmengründungen positiv beeinflußt, hat man der Wechselwirkung von gesellschaftlicher Vielfalt, Menschenkapital und Unternehmertum wenig Beachtung geschenkt. Die Autoren stellen die These auf, daß geringe Schranken beim Eintritt in den regionalen Arbeitsmarkt (wie z.T. durch das Vorhandensein einer vielschichtigen Bevölkerung bewiesen wird) und unterschiedliche Kultur den Zustrom einer besonderen Art von Menschenkapital ermöglichen, das Innovation fördert und Informationsströme beschleunigt, und somit zu einer höheren Rate neuer Firmengründungen führt. Die empirischen Ergebnisse bestätigen die Haupthypothese. Mittels Anwendung der langfristigen Gründungs- und Unternehmensmikrodaten (Longitudinal Establishment and Enterprise Microdata - LEEM) wird die Hypothese auf der Ebene von Statistiken von Großstadtregionen (Metropolitan Statistical Areas - MSAs) wie als auch auf derjenigen der Arbeitsmarktregionen (Labor Market Areas - LMAs) geprüft. Es ergibt sich, daß die Gründung neuer Firmen sich als stark mit kultureller Kreativität verbunden erweist, wenn sie auf in der Literatur vorgeschlagene Variable hin untersucht werden. Firmengründung steht in positivem und signifkantem Verhältnis zum Diversity Index, bleibt jedoch unbedeutend in Bezug auf den Melting Pot Index. Die Ergebnisse legen nahe, daß dem gesellschaftlichen Lebensraum einer Region Aufmerksamkeit geschenkt werden muß, wenn regionale Unternehmertumsdynamik gefördert werden soll. Lee S. Y., Florida R. y Acs Z. J. (2004) Creatividad y empresarialidad: un análisis regional de la formación de nuevas empresas, Regional Studies 38 , 879-891. Entender los factores que promueven o mitigan el nacimiento de nuevas empresas es crucial para los esfuerzos de desarrollo económico regional, puesto que un nivel alto en la creación de nuevas empresas contribuye de forma significativa a la vitalidad económica regional y es una señal muy importante de una economía dinámica. La literatura sugiere que varios factores como el desempleo, la densidad/crecimiento de la población, la estructura industrial, el capital humano, la disponibilidad de capital financiero, y características de la empresarialidad influyen significativamente en la variación regional de los índices de nacimiento de nuevas empresas. En este estudio exploramos si existen conexiones entre las características sociales regionales, el capital humano, y la formación de nuevas empresas. Argumentamos que la diversidad social y la creatividad tienen un relación positiva con la formación de nuevas empresas. Basándose en las contribuciones de la urbanista Jane Jacobs, Lee, Florida y Gates (2002) mostraron que la diversidad social y el capital humano tienen relaciones positivas y significativas con la producción de innovación regional medida por medio de la producción de patentes per cápita. Mientras que es bien sabido que el stock de capital humano regional afecta positivamente los índices de formación de nuevas empresas, se ha prestado poca atención a la interacción entre la diversidad social, el capital humano y la empresarialidad. Nosotros argumentamos que unas barreras bajas de entrada al mercado laboral regional (como lo demuestra en parte la presencia de una población diversa) y una cultura diversa facilitan el influjo de una cierta clase de capital humano que promueve la innovación y que acelera el flujo de información, llevando a un índice mayor de formación de nuevas empresas. Los resultados empíricos apoyan nuestra hipótesis principal. Utilizando el Longitudinal Establishment and Enterprise Microdata (LEEM), testamos la hipótesis a nivel de las áreas Metropolitanas para Estadísticas (MSAs) así como a nivel de las áreas de Mercado Laboral (LMAs). Encontramos que la formación de nuevas empresas está fuertemente asociada con la creatividad cultural cuando ésta está controlada por las variables que se sugieren en la literatura. La formación de empresas está positiva y significativamente asociada con el índice de Diversidad, pero no de forma significativa con el índice Melting Pot. Los resultados sugieren que necesitamos prestar atención al hábitat social de una región para estimular una dinámica de empresarialidad regional.

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

Volume (Year): 38 (2004)
Issue (Month): 8 (January)
Pages: 879-891
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Handle: RePEc:taf:regstd:v:38:y:2004:i:8:p:879-891

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Keywords: Creativity; New firm formation; Entrepreneurship;

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  1. Sarah Low & Jason Henderson & Stephan Weiler, 2005. "Gauging a region's entrepreneurial potential," Economic Review, Federal Reserve Bank of Kansas City, issue Q III, pages 61-89. [Downloadable!]
  2. Michael Fritsch, 2007. "The Geography and the Effect of Creative People in Germany," Jena Economic Research Papers in Economics 2007-001, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek. [Downloadable!]
  3. Audretsch, David B & Dohse, Dirk & Niebuhr, Annekatrin, 2008. "Cultural Diversity and Entrepreneurship: A Regional Analysis for Germany," CEPR Discussion Papers 6945, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Florida, Richard & Mellander, Charlotta & Qian, Haifeng, 2008. "Creative China? The University, Tolerance and Talent in Chinese Regional Development," Working Paper Series in Economics and Institutions of Innovation 145, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
  5. Singh-Knights, Doolarie & Smith, Dennis & Budumuru, Yoganand, 2006. "Determinants of Entrepreneurship and Small Business Activity: A Two-Stage Regression Analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21447, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  6. Chad Moutray, 2008. "Educational Attainment and Other Characteristics of the Self-Employed: An Examination using Data from the Panel Study of Income Dynamics," The Office of Advocacy Small Business Working Papers 07cm, U.S. Small Business Administration, Office of Advocacy. [Downloadable!]
  7. Westlund, Hans & Calidoni-Lundberg, Federica, 2007. "THE CREATIVE CLASS AND SOCIAL CAPITAL - civil society, regional development and high-tech employment in Japan," Working Paper Series in Economics and Institutions of Innovation 112, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
  8. Sjoerd Beugelsdijk, 2007. "Entrepreneurial culture, regional innovativeness and economic growth," Journal of Evolutionary Economics, Springer, vol. 17(2), pages 187-210, April. [Downloadable!] (restricted)
  9. whitney Oliver Peake & Maria I. Marshall, 2006. "What Do We Really Know About Entrepreneurs? An Analysis Of Nascent Entrepreneurs In Indiana," Working Papers 06-14, Purdue University, College of Agriculture, Department of Agricultural Economics. [Downloadable!]
  10. Zoltan Acs & Pamela Mueller, 2008. "Employment effects of business dynamics: Mice, Gazelles and Elephants," Small Business Economics, Springer, vol. 30(1), pages 85-100, January. [Downloadable!] (restricted)
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  11. Sander Wennekers & André van Stel & Roy Thurik & Paul Reynolds, 2005. "Nascent entrepreneurship and the level of economic development," Papers on Entrepreneurship, Growth and Public Policy 2005-14, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
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  12. Yvonne von Friedrichs & Hakan Boter, 2009. "Meeting Radical Change and Regional Transition: Regional Closedowns and the Role of Entrepreneurship," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 7(2), pages 99-122. [Downloadable!]
  13. Zoltan J. Acs & Monika I. Megyesi, 2007. "Creativity and Industrial Cities: A Case Study of Baltimore," Papers on Entrepreneurship, Growth and Public Policy 2007-08, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
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  14. Wojan, Timothy R. & McGranahan, David A., 2007. "Ambient Returns: Creative Capital's Contribution to Local Manufacturing Competitiveness," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 36(1), April. [Downloadable!]
  15. 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!]
  16. Nijkamp, Peter, 2009. "Entrepreneurship, Development, and the Spatial Context Retrospect and Prospect," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  17. Niels Bosma & R. Sternberg & Zoltan Acs, 2008. "The Entrepreneurial Advantage of World Cities," Scales Research Reports H200810, EIM Business and Policy Research. [Downloadable!]
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