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Sources of Persistence in Regional Start-Up Rates - evidence from Sweden

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Author Info

  • Andersson, Martin

    ()
    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Koster, Sierdjan

    ()
    (Urban and Regional Studies Institute, Faculty of Spatial Science, University of Groningen)

Abstract

The 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 ‘sticky’ 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 Info

Paper 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.

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Length: 27 pages
Date of creation: 18 Apr 2009
Date of revision:
Publication status: Forthcoming in Journal of Economic Geography.
Handle: RePEc:hhs:cesisp:0177

Contact details of provider:
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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Related research

Keywords: entrepreneurship; start-ups; persistence; path-dependence; start-up dynamics; geography of entrepreneurship;

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