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The location of new firms - Influence of commuting behaviour

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  • Backman, Mikaela

    (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School, & Centre of Excellence for Science and Innovation Studies (CESIS))

  • Karlsson, Charlie

    (Centre of Excellence for Science and Innovation Studies (CESIS), Jönköping International Business School, Blekinge Institute of Technology, & University of Southern Denmark)

Abstract

In this paper, we analyse where people who become self-employed actually start their firms. In the entrepreneurship literature, it is generally assumed that individuals who start a firm start it where they live. We question this general assumption and show that this does not hold for commuters. Our results show that of those individuals that were short-distance commuters in 2007 and become self-employed in 2008, 90.1 percent started their firm in their work munici-pality. Only 9.4 percent started their firm in their residence municipality. For long-distance commuters, the figures were 93.6 and 6.4 percent, respectively. Our econometric estimations show that the probability to start a firm in the work municipality increases with the number of years as a commuter, with commuting to a larger municipality, and with the relative size of the work municipality compared to the municipality of residence. Our results indicate that the entrepreneurship literature must reconsider its general statement that individuals start firms where they live.

Suggested Citation

  • Backman, Mikaela & Karlsson, Charlie, 2015. "The location of new firms - Influence of commuting behaviour," Working Paper Series in Economics and Institutions of Innovation 404, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0404
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    Cited by:

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    More about this item

    Keywords

    Entrepreneurship; self-employment; location; commuting; networks; micro-level data;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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