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Clusters of Entrepreneurship

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Author Info

  • Edward L. Glaeser

    ()
    (Harvard University, Faculty of Arts and Sciences; Harvard Kennedy School)

  • William R. Kerr

    ()
    (Harvard Business School, Entrepreneurial Management Unit)

  • Giacomo A. M. Ponzetto

    ()
    (CREI and Universitat Pompeu Fabra)

Abstract

Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people.

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File URL: http://www.hbs.edu/research/pdf/10-019.pdf
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Bibliographic Info

Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 10-019.

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Length: 54 pages
Date of creation: Sep 2009
Date of revision:
Handle: RePEc:hbs:wpaper:10-019

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Related research

Keywords: Entrepreneurship; Industrial Organization; Chinitz; Agglomeration; Clusters; Cities.;

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References

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  1. Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
    • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  2. Buenstorf, Guido & Klepper, Steven, 2010. "Why does entry cluster geographically? Evidence from the US tire industry," Journal of Urban Economics, Elsevier, vol. 68(2), pages 103-114, September.
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  6. 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.
  7. Gilles Duranton & Diego Puga, 2000. "Nursery Cities: Urban diversity, process innovation, and the life-cycle of products," Working Papers dpuga-00-01, University of Toronto, Department of Economics.
  8. Figueiredo, Octavio & Guimaraes, Paulo & Woodward, Douglas, 2002. "Home-field advantage: location decisions of Portuguese entrepreneurs," Journal of Urban Economics, Elsevier, vol. 52(2), pages 341-361, September.
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  1. Semi-regular Dimes
    by BEN LORICA in The practical quant on 2009-10-08 16:29:00
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