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Human Capital and New Firm Formation

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Author Info
Karlsson, Charlie () (Jönköping International Business School)
Backman, Mikaela () (Jönköping International Business School)

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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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File URL: http://www.ihh.hj.se/ciseg/documents/CISEG-WP-No-1.pdf
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Publisher 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

Contact details of provider:
Postal: CISEG (Centre for Innovation Systems, Entrepreneurship and Growth), Jönköping International Business School, P.O. Box 1026, SE-551 11 Jönköping, Sweden
Web page: http://www.ihh.hj.se/eng/

For technical questions regarding this item, or to correct its listing, contact: (Katarina Blåman).

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

Find related papers by JEL classification:
L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes

This paper has been announced in the following NEP Reports:

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This page was last updated on 2009-11-22.

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