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An Analysis Of The Relationship Between New Firm Formation And Economic Development In The Northeast Region Of The United States

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  • SAIMA BASHIR

    ()
    (Division of Resource Management, 2040, Agricultural Sciences Building, P. O. Box 6108, West Virginia University, Morgantown, WV 26506-6108, USA)

  • TESFA GEBREMEDHIN

    (Division of Resource Management, 2040, Agricultural Sciences Building, P. O. Box 6108, West Virginia University, Morgantown, WV 26506-6108, USA)

Abstract

The overall objective of this study is to provide policy makers identifies and estimates the role and impacts of new firm formation in the Northeast region of the United States. The empirical model of this study is derived from the three-equation simultaneous model of Deller et al. (2001). In this study, Three-Stage Least Squares (3SLS) method is used to estimate the simultaneous equations model. The research findings indicate that population density and per capita income have a positive link with new firm formation. Higher population density and per capita income encourage entrepreneurs to start new firms in the region. This leads to an increase of new jobs, which is a positive contribution to economic development in the Northeast region.

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Bibliographic Info

Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal Journal of Developmental Entrepreneurship.

Volume (Year): 16 (2011)
Issue (Month): 03 ()
Pages: 289-306

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Handle: RePEc:wsi:jdexxx:v:16:y:2011:i:03:p:289-306

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Keywords: New firm formation; economic development; Northeast region; simultaneous analysis;

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