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What determines entrepreneurial clusters?

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  • L. Guiso
  • F. Schivardi

    ()

Abstract

We contrast two potential explanations of the substantial differences in entrepreneurial activity observed across geographical areas - entry costs and external effects. We extend the Lucas model of entrepreneurship to allow for heterogeneous entry costs and for externalities that shift the distribution of entrepreneurial talents. We show that these assumptions have opposite predictions on the relation between entrepreneurial activity and firm level TFP - with different entry costs, in areas with more entrepreneurs firms’ average productivity should be lower and vice versa. We test these implications on a sample of Italian firms and unambiguously reject the entry costs explanation in favor of the externalities one. We also investigate the sources of external effects, finding robust evidence that learning externalities are an important determinant of cross-sectional differences in entrepreneurial activity

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Bibliographic Info

Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200616.

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Date of creation: 2006
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Handle: RePEc:cns:cnscwp:200616

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Keywords: entrepreneurship; clustering; agglomeration economies;

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Citations

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Cited by:
  1. Di Addario, Sabrina & Vuri, Daniela, 2010. "Entrepreneurship and Market Size: The Case of Young College Graduates in Italy," IZA Discussion Papers 5098, Institute for the Study of Labor (IZA).
  2. Mina Baliamoune-Lutz, 2008. "On Growth and Development," ICER Working Papers, ICER - International Centre for Economic Research 13-2008, ICER - International Centre for Economic Research.
  3. G. Marletto, 2007. "Crossing The Alps: Three Transport Policy Options," Working Paper CRENoS 200712, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  4. M. Pitzalis & I. Sulis & M. Porcu, 2008. "Differences of Cultural Capital among Students in Transition to University. Some First Survey Evidences," Working Paper CRENoS 200805, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  5. Luigi Guiso & Aldo Rustichini, 2011. "What drives women out of entrepreneurship? The joint role of testosterone and culture," Economics Working Papers, European University Institute ECO2011/02, European University Institute.
  6. Silvia Ardagna & Annamaria Lusardi, 2009. "Where does regulation hurt? Evidence from new businesses across countries," NBER Working Papers 14747, National Bureau of Economic Research, Inc.
  7. Giuseppe Croce & Edoardo Di Porto & Emanuela Ghignoni & Andrea Ricci, 2013. "Employer education, agglomeration and workplace training: poaching vs knowledge spillovers," Working Papers, University of Rome La Sapienza, Department of Public Economics 162, University of Rome La Sapienza, Department of Public Economics.
  8. Brunello, Giorgio & Langella, Monica, 2014. "Local Agglomeration, Entrepreneurship and the Great Recession: Evidence from Italian Industrial Districts," IZA Discussion Papers 8331, Institute for the Study of Labor (IZA).
  9. Di Addario, Sabrina, 2011. "Job search in thick markets," Journal of Urban Economics, Elsevier, vol. 69(3), pages 303-318, May.
  10. Silvia Ardagna & Annamaria Lusardi, 2010. "Explaining International Differences in Entrepreneurship: The Role of Individual Characteristics and Regulatory Constraints," NBER Chapters, National Bureau of Economic Research, Inc, in: International Differences in Entrepreneurship, pages 17-62 National Bureau of Economic Research, Inc.
  11. Baliamoune-Lutz, Mina, 2009. "Entrepreneurship and Reforms in Developing Countries," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  12. Silvia Ardagna & Annamaria Lusardi, 2008. "Explaining International Differences in Entrepreneurship: The Role of Individual Characteristics and Regulatory Constraints," NBER Working Papers 14012, National Bureau of Economic Research, Inc.
  13. I. Sulis & M. Porcu, 2008. "Assessing the Effectiveness of a Stochastic Regression Imputation Method for Ordered Categorical Data," Working Paper CRENoS 200804, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  14. O. Carboni & G. Medda, 2007. "Government Size and the Composition of Public Spending in a Neoclassical Growth Model," Working Paper CRENoS 200701, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  15. Fernanda Llussa, 2011. "Determinants of Entrepreneurship: Are Women Different?," FEUNL Working Paper Series, Universidade Nova de Lisboa, Faculdade de Economia wp555, Universidade Nova de Lisboa, Faculdade de Economia.
  16. Emil PAPAZOV, 2011. "The Role of Entrepreneurship for Cluster Formation in the Economy," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 12(4), pages 839-846, October.

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