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Entrepreneurship Capital: Determinants and Impact

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  • David B. Audretsch

    ()

  • Max Keilbach

    ()

Abstract

The literature focusing on the geography of entrepreneurship has developed some-thing of a schizophrenic approach. On the one hand is a series of studies, which have tried to identify characteristics specific to particular regions that account for inter-spatial variations in entrepreneurship. On the other hand is a literature that has ex-amined the impact of entrepreneurship on the economic performance of that region. While the emergence of a statistical link between economic performance and entre-preneurial activity is of considerable interest to both scholars and policy makers alike, it considers the amount of entrepreneurial activity specific to a region as an exogenous endowment. Thus, little guidance is provided as to how policy could ac-tually influence economic performance by generating more entrepreneurial activity. The purpose of this paper is explicitly link these two disparate literatures by suggest-ing that entrepreneurial activity is not exogenous, as this second strand of literature implies, but rather, as the earlier studies indicated, shaped by a number of factors specific to the particular location. Moreover, if entrepreneurship capital cannot be assumed to be exogenous, a single equation estimation would lead to biased results. We therefore estimate both equations simultaneously using three stage least square estimation. The empirical evidence suggests that the degree of spatially specific entrepreneur-ship capital is shaped by regional-specific factors reflecting both entrepreneurial op-portunities and the entrepreneurial capabilities. In turn, the extent of entrepreneur-ship capital has a positive impact on regional economic performance.

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Bibliographic 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 2004-37.

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Length: 27 pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:esi:egpdis:2004-37

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Keywords: Entrepreneurship; Economic Output; Production Function; Endogeneity Bias; Three Stage Least Squares;

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References

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Citations

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Cited by:
  1. Minniti, Maria & Lévesque, Moren, 2008. "Recent developments in the economics of entrepreneurship," Journal of Business Venturing, Elsevier, vol. 23(6), pages 603-612, November.
  2. Petrakos, George & Dimitris, Kallioras & Ageliki, Anagnostou, 2007. "A Generalized Model of Regional Economic Growth in the European Union," Papers DYNREG12, Economic and Social Research Institute (ESRI).
  3. Alessandro STERLACCHINI, 2006. "Innovation, Knowledge and Regional Economic Performances: Regularities and Differences in the EU," Working Papers 260, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  4. Guiso, Luigi & Schivardi, Fabiano, 2005. "Learning to be an Entrepreneur," CEPR Discussion Papers 5290, C.E.P.R. Discussion Papers.
  5. Jacques Poot, 2007. "Demographic Change and Regional Competitiveness: The Effects of Immigration and Ageing," Population Studies Centre Discussion Papers dp-64, University of Waikato, Population Studies Centre.
  6. Pontus Braunerhjelm & Zoltan Acs & David Audretsch & Bo Carlsson, 2010. "The missing link: knowledge diffusion and entrepreneurship in endogenous growth," Small Business Economics, Springer, vol. 34(2), pages 105-125, February.
  7. Berthold, Norbert & Gründler, Klaus, 2012. "Entrepreneurship and economic growth in a panel of countries," Wirtschaftswissenschaftliche Beiträge 118, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
  8. Audretsch, David B. & Bönte, Werner & Keilbach, Max, 2008. "Entrepreneurship capital and its impact on knowledge diffusion and economic performance," Journal of Business Venturing, Elsevier, vol. 23(6), pages 687-698, November.
  9. Aloysius Gunadi, Brata, 2007. "Spatial Concentration of the Informal Small and Cottage Industry in Indonesia," MPRA Paper 12622, University Library of Munich, Germany, revised 2008.
  10. Artelaris, Panagiotis & Arvanitidis, Paschalis & Petrakos, George, 2006. "Theoretical and Methodological Study on Dynamic Growth Regions and Factors Explaining their Growth Performance," Papers DYNREG02, Economic and Social Research Institute (ESRI).
  11. André van Stel & Roy Thurik & Chantal Hartog & Simon Parker, 2010. "The two-way relationship between entrepreneurship and economic performance," Scales Research Reports H200822, EIM Business and Policy Research.

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