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A Spatial Analysis of Entrepreneurship and Institutional Quality: Evidence from U.S. Metropolitan Areas

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  • Bologna, Jamie

Abstract

This paper uses the Stansel (2013) economic freedom index for a maximum of 375 U.S. metropolitan areas to estimate the effect of economic freedom on entrepreneurship while con-trolling for spatial dependence. This paper finds statistically significant evidence that increas-es in economic freedom in one area result in increases in entrepreneurial activity in neighbor-ing areas. Furthermore, the total (direct plus indirect) effects of an increase in economic free-dom on entrepreneurship are positive and statistically significant, indicating that a positive-sum game is present. However, these effects are small in magnitude. In order to explain a cumulative one standard deviation increase in either one of the entrepreneurial measures pre-sented in this paper, there would have to be an increase in the freedom index equivalent to moving from the least-free area to the most-free area.

Suggested Citation

  • Bologna, Jamie, 2014. "A Spatial Analysis of Entrepreneurship and Institutional Quality: Evidence from U.S. Metropolitan Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 44(2).
    • Handle: RePEc:ags:jrapmc:243968
    DOI: 10.22004/ag.econ.243968
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    Cited by:

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    2. Daniel L. Bennett, 2021. "Local economic freedom and creative destruction in America," Small Business Economics, Springer, vol. 56(1), pages 333-353, January.
    3. Joshua C. Hall & Donald J. Lacombe & Shree B. Pokharel, 2016. "Freedom and entrepreneurship: a spatial econometric approach," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 5(3), pages 404-411, November.
    4. Stansel, Dean, 2019. "Economic Freedom in U.S. Metropolitan Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 49(1), March.
    5. Daniel L. Bennett & Boris Nikolaev, 2021. "Individualism, pro-market institutions, and national innovation," Small Business Economics, Springer, vol. 57(4), pages 2085-2106, December.
    6. Jolley, G. Jason & Uzuegbunam, Ikenna & Glazer, John, 2017. "TechGROWTH Ohio: Public Venture Capital and Rural Entrepreneurship," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 48(2), July.
    7. Chambers, Dustin & O'Reilly, Colin, 2019. "Entry Regulations and Income Inequality at the Regional Level," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 49(1), April.
    8. Gary A. Wagner & Jamie Bologna Pavlik, 2020. "Patent intensity and concentration: The effect of institutional quality on MSA patent activity," Papers in Regional Science, Wiley Blackwell, vol. 99(4), pages 857-898, August.
    9. Ryan H. Murphy & Ellen Taylor & Dean Stansel, 2023. "Economic freedom at metropolitan statistical area borders," American Journal of Economics and Sociology, Wiley Blackwell, vol. 82(2), pages 141-149, March.

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