Sources of Persistence in Regional Start-Up Rates - evidence from Sweden
AbstractThe relationship between start-up rates and regional economic development has been studied rather extensively in recent years. Dynamics in start-up rates have however received considerably less attention. In this paper we analyze the persistence of start-up rates across Swedish regions over a decade and analyze the sources of persistence. We find overall persistence in start-up rates. Start-up rates of a decade earlier are able to explain over 40 % of the variation in current start-up rates across regions. The paper introduces and tests two mechanisms that can account for persistence in start-up rates across regions: (i) path-dependence in start-up activity, such that there is a response mechanism between previous and current start-up activity and (ii) spatially â€˜stickyâ€™ and durable determinants of start-ups. A dynamic panel analysis applying the system GMM estimator of lagged start-up rates on current start-up rates, confirms that persistence in start-up activity can be explained by both effects. Using transition probability analysis and quantile regression techniques, we also show that there is a regional dimension in persistence.
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Bibliographic InfoPaper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 177.
Length: 27 pages
Date of creation: 18 Apr 2009
Date of revision:
Publication status: Forthcoming in Journal of Economic Geography.
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Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/
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entrepreneurship; start-ups; persistence; path-dependence; start-up dynamics; geography of entrepreneurship;
Other versions of this item:
- Martin Andersson & Sierdjan Koster, 2011. "Sources of persistence in regional start-up rates--evidence from Sweden," Journal of Economic Geography, Oxford University Press, vol. 11(1), pages 179-201, January.
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-04-25 (All new papers)
- NEP-ENT-2009-04-25 (Entrepreneurship)
- NEP-GEO-2009-04-25 (Economic Geography)
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