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Balanced Skills and the City: An Analysis of the Relationship between Entrepreneurial Skill Balance, Thickness and Innovation

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  • Elisabeth Bublitz

    ()
    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

  • Michael Fritsch

    ()
    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

  • Michael Wyrwich

    ()
    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

Abstract

Being a "jack-of-all-trades" increases the probability of running an entrepreneurial venture successfully; but what happens to "jack-of-few-trades" who lack sufficient skills? This paper investigates a possible compensation mechanism between balanced skills and cities, and how this compensatory measure relates to performance. Specifically, we test and find support for the idea put forward by Helsley and Strange (2011) that high market thickness, such as that found in cities, can compensate for a lack of entrepreneurial skill balance. The results indicate that entrepreneurs with low skill balance benefit more from locating in cities than their counterparts with high skill balance. Innovative firms do not differ from other businesses in this respect.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2013-010.

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Date of creation: 26 Feb 2013
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Handle: RePEc:jrp:jrpwrp:2013-010

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Keywords: Agglomeration; Entrepreneurship; Balanced Skills; Thick Markets; Urban Diversity;

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  1. Michael Storper & Anthony J. Venables, 2003. "Buzz: face-to-face contact and the urban economy," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 20008, London School of Economics and Political Science, LSE Library.
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