Human Capital and New Firm Formation
AbstractThis 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 InfoPaper provided by Centre for Innovation Systems, Entrepreneurship and Growth, Jönköping International Business School in its series CISEG Working Papers Series with number 1.
Length: 31 pages
Date of creation: 03 Apr 2008
Date of revision:
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/
More information through EDIRC
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, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-14 (All new papers)
- NEP-EDU-2008-12-14 (Education)
- NEP-ENT-2008-12-14 (Entrepreneurship)
- NEP-GEO-2008-12-14 (Economic Geography)
- NEP-HRM-2008-12-14 (Human Capital & Human Resource Management)
- NEP-URE-2008-12-14 (Urban & Real Estate Economics)
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- 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.
- 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.
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