The Determinants of New-firm Survival across Regional Economies
AbstractMotivated by differences in new-firm survival across regions, this paper explores the impact of regional human capital on new-firm survival rates. New-firm survival is interpreted through formation rates of surviving versus closed firms in the service sector. By incorporating knowledge spillovers through a geographical variation model for Labor Market Areas, we empirically test the relationship between regional human capital stocks and new-firm survival. The expected positive relationship between regional human capital and new-firm survival is supported for the period 1993-1995, but is not as strong for the recession period 1990-1992. Controlling for human capital, the new-firm survival rate is negatively related to service sector specialization and positively related to all industry intensity, suggesting that city size and diversity may be an important determinant of new-firm survival in both periods.
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Bibliographic InfoPaper 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 2007-04.
Length: 40 pages
Date of creation: Dec 2006
Date of revision:
Find related papers by JEL classification:
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L80 - Industrial Organization - - Industry Studies: Services - - - General
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-10 (All new papers)
- NEP-CSE-2007-02-10 (Economics of Strategic Management)
- NEP-ENT-2007-02-10 (Entrepreneurship)
- NEP-GEO-2007-02-10 (Economic Geography)
- NEP-HRM-2007-02-10 (Human Capital & Human Resource Management)
- NEP-KNM-2007-02-10 (Knowledge Management & Knowledge Economy)
- NEP-URE-2007-02-10 (Urban & Real Estate Economics)
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