The Localization of Entrepreneurship Capital - Evidence from Germany
AbstractWhereas initially physical capital and later, knowledge capital were viewed as crucial for growth, more recently a very different factor, entrepreneurship capital, has emerged as a driving force of economic growth. In this paper, we define a region's capacity to create new firms start-ups as the region's entrepreneurship capital. We then investigate the local embeddedness of this variable and which variables have an impact on this variable. Using data for Germany, we find that knowledge-based entrepreneurship capital is driven by local levels of knowledge creation and the acceptance of new ideas, indicating that local knowledge flows play an important role. Low-tech entrepreneurship capital is rather increased by regional unemployment and driven by direct incentives such as subsidies. All three measures are locally clustered, indicating that indeed, entrepreneurship capital is a phenomenon that is driven by local culture, and is therefore locally bounded.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-029.
Date of creation: 02 Jul 2007
Date of revision:
Entrepreneurship capital; Local Clusters; Knowledge Spillovers; Spatial Econometrics;
Other versions of this item:
- David B. Audretsch & Max Keilbach, 2007. "The localisation of entrepreneurship capital: Evidence from Germany," Papers in Regional Science, Wiley Blackwell, vol. 86(3), pages 351-365, 08.
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-07-13 (All new papers)
- NEP-CFN-2007-07-13 (Corporate Finance)
- NEP-EEC-2007-07-13 (European Economics)
- NEP-ENT-2007-07-13 (Entrepreneurship)
- NEP-GEO-2007-07-13 (Economic Geography)
- NEP-HRM-2007-07-13 (Human Capital & Human Resource Management)
- NEP-INO-2007-07-13 (Innovation)
- NEP-KNM-2007-07-13 (Knowledge Management & Knowledge Economy)
- NEP-SOC-2007-07-13 (Social Norms & Social Capital)
- NEP-URE-2007-07-13 (Urban & Real Estate Economics)
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