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Creating Firms for a New Century: Determinants of Firm Creation around 1900

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Author Info
Joerg Baten ()

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Abstract

A rapidly growing literature in industrial economics and regional economics uses data sets of individual firms or regional firm creation rates to answer the central question: What makes entrepreneurs? Which factors encourage some people to set up their own business and create jobs, and what prevents potential entrepreneurs from doing so? This contribution explores the determinants of regional differences in firm creation rates by using a new data set of 4036 individual firms from Southwest Germany around 1900. Agglomeration effects and earlier firm creations stimulate current firm creation. In addition, a small and medium firm environment allows the formation of specific human capital -- another favourable factor for a dynamic firm creation process in some regions.

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Paper provided by CESifo GmbH in its series CESifo Working Paper Series with number CESifo Working Paper No. 1065.

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Date of creation: 2003
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Handle: RePEc:ces:ceswps:_1065

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Find related papers by JEL classification:
L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
N63 - Economic History - - Manufacturing and Construction - - - Europe: Pre-1913
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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  1. Krugman, Paul, 1998. "Space: The Final Frontier," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 161-74, Spring. [Downloadable!] (restricted)
  2. Paul Reynolds & David Storey & Paul Westhead, 1994. "Cross-national Comparisons of the Variation in New Firm Formation Rates," Regional Studies, Taylor and Francis Journals, vol. 28(4), pages 443-456, July. [Downloadable!] (restricted)
  3. Alan M. Taylor, 1996. "International Capital Mobility in History: The Saving-Investment Relationship," NBER Working Papers 5743, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. 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)
  5. Gioacchino Garofoli, 1994. "New Firm Formation and Regional Development: The Italian Case," Regional Studies, Taylor and Francis Journals, vol. 28(4), pages 381-393, July. [Downloadable!] (restricted)
  6. Kevin O'Rourke & Jeffrey Williamson, 2001. "Globalization and History," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650592, December.
  7. David Audretsch & Michael Fritsch, 1999. "The Industry Component of Regional New Firm Formation Processes," Review of Industrial Organization, Springer, vol. 15(3), pages 239-252, November. [Downloadable!] (restricted)
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