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Agglomeration Externalities and Entrepreneurship - micro-level evidence from Sweden

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  • Baltzopoulos, Apostolos

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

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    Abstract

    Past research on the effects of agglomeration externalities on regional economic development is inconclusive and has focused mainly on employment growth and innovative output. This paper considers the link between agglomeration externalities and entrepreneurship. It does so by looking at the importance of Marshallian specialization and Jacobian diversity externalities for regional entrepreneurial output implementing an individual level data set that allows considering not only the effect on total number of start-ups but also on the propensity of the entrepreneur to start his new venture in an industry he has previous experience in. The results suggest that while Marshallian externalities have a positive, Jacobian externalities have a negative effect on regional entrepreneurial output. However, Jacobian externalities increase the probability that an entrepreneur will start a firm in an industry he has relevant experience in, especially in the case of knowledge intensive industries.

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    File URL: http://www.kth.se/dokument/itm/cesis/CESISWP190.pdf
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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 190.

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    Length: 28 pages
    Date of creation: 26 Aug 2009
    Date of revision:
    Handle: RePEc:hhs:cesisp:0190

    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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    Keywords: Entrepreneurship; externalities; spatial agglomeration;

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    1. R. Paci & S. Usai, 1999. "The role of specialisation and diversity externalities in the agglomeration of innovative activities," Working Paper CRENoS 199915, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
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    13. Lydia Greunz, 2004. "Industrial structure and innovation - evidence from European regions," Journal of Evolutionary Economics, Springer, vol. 14(5), pages 563-592, December.
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