The role of the regional milieu for the decision to start a new firm: Empirical evidence for Germany
AbstractAlthough comprehensive data from official statistics on new firm formation and entrepreneurs starting a new business are lacking in Germany, we know from empirical studies that entry rates differ between regions, and that the propensity to become an entrepreneur is influenced by socio-demographic variables like sex and age. The focus of our paper is on the link of these two stylised facts. Our econometric study is based on data for 10.000 persons from a recent representative survey of the population in ten German planning regions. We use a version of the probit model that takes care of the regional stratification of the data, and the results of the nonlinear models are carefully interpreted and illustrated. We show that the region matters for the decision to start a new business ceteris paribus, i.e. after controlling for sex, age, education etc.. In a second step we peek inside the black box of the regional effect by showing that the regional level of current start-up activity has a positive ceteris paribus effect on the propensity to become an entrepreneur, while the share of self-employed in the region does not matter. The consequences of these findings for regional policies to encourage new firm entry are discussed briefly in the concluding section.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Regional Science Association in its series ERSA conference papers with number ersa02p396.
Date of creation: Aug 2002
Date of revision:
Contact details of provider:
Postal: Augasse 2-6, 1090 Vienna, Austria
Web page: http://www.ersa.org
Other versions of this item:
- Wagner, Joachim & Sternberg, Rolf, 2002. "The Role of the Regional Milieu for the Decision to Start a New Firm: Empirical Evidence for Germany," IZA Discussion Papers 494, Institute for the Study of Labor (IZA).
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rolf Sternberg & Christine Tamasy, 1999. "Munich as Germany's No. 1 High Technology Region: Empirical Evidence, Theoretical Explanations and the Role of Small Firm/Large Firm Relationships," Regional Studies, Taylor and Francis Journals, vol. 33(4), pages 367-377.
- Eric A. Nerlinger & Franz-Josef Bade, 2000. "The spatial distribution of new technology-based firms: Empirical results for West-Germany," Papers in Regional Science, Springer, vol. 79(2), pages 155-176.
- Westlund, Hans & Bolton, Roger, 2003. " Local Social Capital and Entrepreneurship," Small Business Economics, Springer, vol. 21(2), pages 77-113, September.
- David Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor and Francis Journals, vol. 36(2), pages 113-124.
- Baumol, William J., 1986. "Entrepreneurship and a century of growth," Journal of Business Venturing, Elsevier, vol. 1(2), pages 141-145.
- Joachim Ragnitz & Stefan Eichler & Beate Grundig & Harald Lehmann & Carsten Pohl & Lutz Schneider & Helmut Seitz & Marcel Thum, 2007. "Die demographische Entwicklung in Ostdeutschland : Gutachten im Auftrag des Bundesministeriums für Wirtschaft und Technologie," ifo Dresden Studien, Ifo Institute for Economic Research at the University of Munich, number 41, October.
- Koster, Sierdjan & Karlsson, Charlie, 2009. "New Firm Formation and Economic Development in a Globalizing Economy," Working Paper Series in Economics and Institutions of Innovation 167, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier).
If references are entirely missing, you can add them using this form.