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Why So Many Local Entrepreneurs?

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Author Info
Claudio Michelacci ()
Olmo Silva () (CEMFI, Centro de Estudios Monetarios y Financieros)

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Abstract

We document that the fraction of entrepreneurs who work in the region where they were born is significantly higher than the corresponding fraction for dependent workers. This difference is more pronounced in more developed regions and positively related to the degree of local financial development. Frims created by locals are more valuable and bigger (in terms of capital and employment), operate with more capital intensive technologies, and are able to obtain greater financing per unit of capital invested, than firms created by non-locals. This evidence suggests that there are so many local entrepreneurs because locals can better exploit the financial opportunities available in the region where they were born. This can help explaining how local financial development cause presistent disparities in entrepreneurial activity, technology, and income.

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Paper provided by CEMFI in its series Working Papers with number wp2005_0506.

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Date of creation: May 2005
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Handle: RePEc:cmf:wpaper:wp2005_0506

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Related research
Keywords: Entreprenurship; economic and financial development; social capital.;

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Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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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.:
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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. Markus Kinateder, 2009. "Team Formation in a Network," Working Papers 2009.36, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  2. Oliver Falck & Stephan Heblich & Elke Lüdemann, 2009. "Identity and Entrepreneurship," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Edward L. Glaeser & William R. Kerr, 2008. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," NBER Working Papers 14407, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Javier Díaz-Giménez & Josep Pijoan-Mas, 2006. "Flat Tax Reforms In The U.S.: A Boon For The Income Poor," Working Papers wp2006_0611, CEMFI. [Downloadable!]
    Other versions:
  5. Luigi Guiso & Fabiano Schivardi, 2007. "What determines entrepreneurial clusters?," Economics Working Papers ECO2007/48, European University Institute. [Downloadable!]
    Other versions:
  6. Oliver Falck & Michael Fritsch & Stephan Heblich, 2008. "The Apple doesn't Fall far from the Tree: Location of Start-Ups Relative to Incumbents," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  7. Jose Ceron & Javier Suarez, 2006. "Hot And Cold Housing Markets: International Evidence," Working Papers wp2006_0603, CEMFI. [Downloadable!]
    Other versions:
  8. Guiso, Luigi & Schivardi, Fabiano, 2005. "Learning to be an Entrepreneur," CEPR Discussion Papers 5290, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  9. Aleix Calveras & Juan-José Ganuza & Gerard Llobet, 2005. "Regulation And Opportunism: How Much Activism Do We Need?," Working Papers wp2005_0508, CEMFI. [Downloadable!]
    Other versions:
  10. Beatriz Dominguez & Juan-José Ganuza & Gerard Llobet, 2006. "R&D In The Pharmaceutical Industry: A World Of Small Innovation," Working Papers wp2006_0601, CEMFI. [Downloadable!]
    Other versions:
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This page was last updated on 2009-11-16.

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