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Endogenous Growth and Entrepreneurial Activity in Cities

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  • Zoltan J Acs
  • Catherine Armington

Abstract

Recent theories of economic growth have stressed the role of externalities in generating growth. Using data from the Census Bureau that tracks all employers in the whole U.S. private sector economy, we examine the impact of these externalities, as measured by entrepreneurial activity, on employment growth in Local Market Areas. We find that differences in levels of entrepreneurial activity, diversity among geographically proximate industries, and the extent of human capital are positively associated with variation in growth rates, but the manufacturing sector appears to be an exception.

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Bibliographic Info

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 03-02.

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Date of creation: Jan 2003
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Handle: RePEc:cen:wpaper:03-02

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Keywords: CES; economic; research; micro; data; microdata; chief; economist;

References

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  1. Catherine Armington & Zoltan Acs, 2002. "The Determinants of Regional Variation in New Firm Formation," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(1), pages 33-45.
  2. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  3. Jovanovic, Boyan & Rob, Rafael, 1989. "The Growth and Diffusion of Knowledge," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 56(4), pages 569-82, October.
  4. Glaeser, E.L. & Scheinkman, J.A., 1993. "Economic Growth in a Cross-Section of Cities," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1645, Harvard - Institute of Economic Research.
  5. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  6. Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
    • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  7. Zoltan J Acs & Catherine Armington, 1998. "Longitudinal Establishment And Enterprise Microdata (LEEM) Documentation," Working Papers, Center for Economic Studies, U.S. Census Bureau 98-9, Center for Economic Studies, U.S. Census Bureau.
  8. Antonio Ciccone & Robert E. Hall, 1993. "Productivity and the Density of Economic Activity," NBER Working Papers 4313, National Bureau of Economic Research, Inc.
  9. James E. Rauch, 1991. "Productivity Gains From Geographic Concentration of human Capital: Evidence From the Cities," NBER Working Papers 3905, National Bureau of Economic Research, Inc.
  10. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(3), pages 483-99, June.
  11. Dale W. Jorgenson, 2001. "Information Technology and the U. S. Economy," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1911, Harvard - Institute of Economic Research.
  12. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, American Economic Association, vol. 91(1), pages 1-32, March.
  13. Lazear, Edward, 2003. "Entrepreneurship," IZA Discussion Papers 760, Institute for the Study of Labor (IZA).
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  15. Edward P. Lazear, 2002. "Entrepreneurship," NBER Working Papers 9109, National Bureau of Economic Research, Inc.
  16. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 13(4), pages 421-440, December.
  17. Carree, Martin & Klomp, Luuk, 1996. " Small Business and Job Creation: A Comment," Small Business Economics, Springer, Springer, vol. 8(4), pages 317-22, August.
  18. Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, Elsevier, vol. 43(2), pages 409-429, February.
  19. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, Elsevier, vol. 22(1), pages 3-42, July.
  20. Bresnahan, Timothy F & Gambardella, Alfonso & Saxenian, AnnaLee, 2001. "'Old Economy' Inputs for 'New Economy' Outcomes: Cluster Formation in the New Silicon Valleys," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 835-60, December.
  21. Ian Smith & Zoltan J. Acs & Felix R. FitzRoy, 2002. "High-technology employment and R&D in cities: Heterogeneity vs specialization," The Annals of Regional Science, Springer, Springer, vol. 36(3), pages 373-386.
  22. Wennekers, Sander & Thurik, Roy, 1999. " Linking Entrepreneurship and Economic Growth," Small Business Economics, Springer, Springer, vol. 13(1), pages 27-55, August.
  23. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262540932, December.
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Citations

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Cited by:
  1. Andrés Camacho Murillo & Hector Ríos Hernández, 2011. "Competencia intra-industria, aglomeraciones regionales y crecimiento económico: caso industria de alimentos," REVISTA FACULTAD DE CIENCIAS ECONÓMICAS, UNIVERSIDAD MILITAR NUEVA GRANADA, UNIVERSIDAD MILITAR NUEVA GRANADA.
  2. Andre van Stel & Bart Diephuis, 2004. "Business dynamics and employment growth: a cross-country analysis," Papers on Entrepreneurship, Growth and Public Policy, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group 2004-32, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  3. Marcelin Joanis & Fernand Martin & Suzie St-Cerny, 2004. "Quel avenir pour les politiques de développement régional au Québec ? (Version mise à jour le 9 août 2004)," CIRANO Project Reports 2004rp-05, CIRANO.
  4. Carolina Pasciaroni, 2013. "Ciudades de tamaño medio e innovacion: Una aproximacion sistemica," DOCUMENTOS DE TRABAJO, UNIVERSIDAD TECNOLÓGICA DE BOLÍVAR 011078, UNIVERSIDAD TECNOLÓGICA DE BOLÍVAR.
  5. Michael Fritsch & Pamela Mueller, 2004. "Regional Growth Regimes Revisited - The Case of West Germany," Papers on Entrepreneurship, Growth and Public Policy, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group 2004-04, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  6. Marshall, Maria I. & Samal, Ananya, 2006. "The Effect of Human and Financial Capital on the Entrepreneurial Process: An Urban-Rural Comparison of Entrepreneurs in Indiana," 2006 Annual meeting, July 23-26, Long Beach, CA, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 21155, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. Cassar, Gavin, 2006. "Entrepreneur opportunity costs and intended venture growth," Journal of Business Venturing, Elsevier, vol. 21(5), pages 610-632, September.
  8. Andre van Stel & Martin Carree & Roy Thurik, 2004. "The effect of entrepreneurship on national economic growth: an analysis using the GEM database," Papers on Entrepreneurship, Growth and Public Policy, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group 2004-34, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  9. Gebremeskel Gebremariam & Tesfa Gebremedhin & Peter Schaeffer, 2010. "Analysis of county employment and income growth in Appalachia: a spatial simultaneous-equations approach," Empirical Economics, Springer, Springer, vol. 38(1), pages 23-45, February.

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