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Human Capital and New Firm Formation

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  • Karlsson, Charlie

    ()
    (Jönköping International Business School)

  • Backman, Mikaela

    ()
    (Jönköping International Business School)

Abstract

This paper investigates the impact human capital has on new firm formation, traditionally expected to have a positive influence. Individuals are attracted to regions with a stimulating atmosphere and tend to stay within the same region. Since human capital is partly spatially bounded, the size of municipality accessibility to human capital is expected to have a larger impact than intra-regional and inter-regional interaction. The empirical analysis is based on data on new firm formation at the municipality level in Sweden and accessibility to human capital, defined as minimum three years at tertiary level. The new firm formation is both measured in absolute and in relative terms. In the analysis, the municipalities are divided into four groups; (i) all municipalities, (ii) central municipalities (ii) municipalities within the hinterland in large functional regions and (iii) municipalities within the hinterland in small functional regions. This is done to make the comparison easy. The results indicate that it is the local market, measured as the size of the municipality accessibility to human capital that has a positive impact on new firm formation. Income per capita has a positive impact and average firm size has a negative impact on new firm formation.

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Bibliographic Info

Paper provided by Centre for Innovation Systems, Entrepreneurship and Growth, Jönköping International Business School in its series CISEG Working Papers Series with number 1.

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Length: 31 pages
Date of creation: 03 Apr 2008
Date of revision:
Handle: RePEc:hhs:hjiseg:0001

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Postal: CISEG (Centre for Innovation Systems, Entrepreneurship and Growth), Jönköping International Business School, P.O. Box 1026, SE-551 11 Jönköping, Sweden
Phone: 036-157700
Fax: 036-165069
Web page: http://www.ihh.hj.se/eng/
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Related research

Keywords: human capital; new firm formation; municipalities; accessibility; Sweden;

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Cited by:
  1. Backman, Mikaela & Karlsson, Charlie, 2013. "Who says life is over after 55? Entrepreneurship and an aging population," Working Paper Series in Economics and Institutions of Innovation 325, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  2. Backman, Mikaela & Kohlhase, Janet, 2013. "The Influence of Diversity on the Formation, Survival and Growth of New Firms," Working Paper Series in Economics and Institutions of Innovation 337, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  3. Mikaela Backman, 2013. "Who says life is over after 55?- New firm formation and an ageing population," ERSA conference papers ersa13p58, European Regional Science Association.
  4. Backman, Mikaela, 2013. "Banks and New Firm Formation," Working Paper Series in Economics and Institutions of Innovation 301, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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