Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?
Abstract
Why are some places more entrepreneurial than others? We use Census Bureau data to study local determinants of manufacturing startups across cities and industries. Demographics have limited explanatory power. Overall levels of local customers and suppliers are only modestly important, but new entrants seem particularly drawn to areas with many smaller suppliers, as suggested by Chinitz (1961). Abundant workers in relevant occupations also strongly predict entry. These forces plus city and industry fixed effects explain between sixty and eighty percent of manufacturing entry. We use spatial distributions of natural cost advantages to address partially endogeneity concerns.Download Info
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Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 09-055.Length: 52 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:hbs:wpaper:09-055
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Related research
Keywords: Entrepreneurship; Industrial Organization; Agglomeration; Labor Markets; Input-Output Flows; Innovation; Research and Development; Patents.;Other versions of this item:
- Edward L. Glaeser & William R. Kerr, 2009. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(3), pages 623-663, 09.
- 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.
- Edward Glaeser & William Kerr, 2008. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," Working Papers 08-37, Center for Economic Studies, U.S. Census Bureau.
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- L0 - Industrial Organization - - General
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- L6 - Industrial Organization - - Industry Studies: Manufacturing
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-21 (All new papers)
- NEP-CSE-2008-10-21 (Economics of Strategic Management)
- NEP-ENT-2008-10-21 (Entrepreneurship)
- NEP-GEO-2008-10-21 (Economic Geography)
- NEP-URE-2008-10-21 (Urban & Real Estate Economics)
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