Emergence of Firms: A Sociogeographic Demand Side Perspective
AbstractThis paper presents an analysis of regional start-up rates in the knowledge intensive services and high-tech industries. To supplement prevailing frameworks focusing mainly on supply-side economic factors, we integrate insights from economic geography and population ecology to the entrepreneurship literature as to present a theoretical framework that captures both supply-and demand-side factors, with a specific emphasis on the demand side. Using a rich multi-level data material on all knowledge intensive start-ups across the 286 Swedish municipalities between 1994 and 2002, the empirical analysis focuses on how characteristics of the economic milieu of regions influence firm births. We find that economically affluent regions dominate entrepreneurial activity in terms of firm births, yet a number of much smaller rural region revealed high levels of start ups. Both economic and sociological variables such as knowledge spillovers from universities and firm R&D, and the political regulatory regime within the municipality, exhibit strong influences on firm births. These patterns points to strong support for the notion that ‘the geographic connection’ is important for analyzing entrepreneurial processes.
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Bibliographic InfoPaper provided by The Ratio Institute in its series Ratio Working Papers with number 156.
Length: 36 pages
Date of creation: 14 Sep 2010
Date of revision:
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Firm birth; Geography; Entrepreneurship;
Find related papers by JEL classification:
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-25 (All new papers)
- NEP-CSE-2010-09-25 (Economics of Strategic Management)
- NEP-ENT-2010-09-25 (Entrepreneurship)
- NEP-GEO-2010-09-25 (Economic Geography)
- NEP-SBM-2010-09-25 (Small Business Management)
- NEP-URE-2010-09-25 (Urban & Real Estate Economics)
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