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The Impact of Geographic Differences in Human Capital on Service Firm Formation Rates

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Author Info
Zoltan J. Acs ()
Catherine Armington

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Abstract

Although human capital externalities are a key variable in theories of economic growth, there has been little investigation of the mechanism by which these externalities are realized. We examine the relationship between the local levels of human capital and firm formation rates and find that formation rates differ with the share of adults with college degrees, especially for industries that normally require college-educated founders. They also differ strongly with the local concentration of existing establishments in the same sector, especially for industries serving non-local markets, suggesting that an important mechanism is the spillover of relevant knowledge.

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Publisher Info
Paper provided by Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group in its series Papers on Entrepreneurship, Growth and Public Policy with number 2004-15.

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Length: 48 pages
Date of creation: Mar 2004
Date of revision:
Handle: RePEc:esi:egpdis:2004-15

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Related research
Keywords: Firm formation; Knowledge spillovers; Entrepreneurship; Human capital; Regional growth;

Other versions of this item:

Find related papers by JEL classification:
R1 - Urban, Rural, and Regional Economics - - General Regional Economics
L80 - Industrial Organization - - Industry Studies: Services - - - General
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
O3 - Economic Development, Technological Change, and Growth - - Technological Change

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  1. Gebremeskel H. Gebremariam & Tesfa G. Gebremedhin & Peter V. Schaeffer & Randall W. Jackson, 2008. "Modeling Regional Growth Spillovers: An Analysis of Employment Growth, Migration Behavior, Local Public Services and Household Income in Appalachia," Working Papers e07-13, Virginia Polytechnic Institute and State University, Department of Economics. [Downloadable!]
  2. Mojica, Maribel N. & Gebremedhin, Tesfa G. & Schaeffer, Peter V., 2009. "An Empirical Analysis Of The Link Between Entrepreneurship And Economic Growth In West Virginia," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46723, Southern Agricultural Economics Association. [Downloadable!]
  3. Acs, Zoltan & Audrestch, David & Braunerhjelm, Pontus & Carlsson, Bo, 2007. "The Knowledge Spillover Theory of Entrepreneurship," Working Paper Series in Economics and Institutions of Innovation 77, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
    Other versions:
  4. Mark Drabenstott, . "A review of the federal role in regional economic development," Monograph, Federal Reserve Bank of Kansas City, number 2005arotfrire. [Downloadable!]
  5. Zoltan J. Acs & Catherine Armington & Ting Zhang, 2006. "The Determinants of New-firm Survival across Regional Economies," Papers on Entrepreneurship, Growth and Public Policy 2007-04, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
  6. Mark Drabenstott, 2006. "Rethinking federal policy for regional economic development," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 115-142. [Downloadable!]
  7. David B. Audretsch & Dirk Dohse, 2007. "Location: A Neglected Determinant of Firm Growth," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(1), pages 79-107, April. [Downloadable!] (restricted)
  8. Gebremariam, Gebremeskel H. & Gebremedhin, Tesfa G. & Schaeffer, Peter V., 2006. "An Empirical Analysis of County-Level Determinants of Small Business Growth Poverty in Appalachia: A Spatial Simultaneous-Equations Approach," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35465, Southern Agricultural Economics Association. [Downloadable!]
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