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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
  • Michael Fritsch
  • Michael Wyrwich

Abstract

Entrepreneurs are assumed to be multiskilled, covering a number of skills and achieving in each skill a level as high as possible. Being such a jack-of-all-trades increases the probability of running an entrepreneurial venture successfully, but what happens to the jack-of-few-trades who lacks sufficient skills? This article 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 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 being located in cities than their counterparts with high skill balance. Innovative firms do not differ from other businesses in this respect.

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  • Elisabeth Bublitz & Michael Fritsch & Michael Wyrwich, 2015. "Balanced Skills and the City: An Analysis of the Relationship between Entrepreneurial Skill Balance, Thickness, and Innovation," Economic Geography, Clark University, vol. 91(4), pages 475-508, October.
  • Handle: RePEc:bla:ecgeog:v:91:y:2015:i:4:p:475-508
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    Cited by:

    1. Krieger, Alexander & Block, Joern & Stuetzer, Michael, 2018. "Skill variety in entrepreneurship: A literature review and research directions," MPRA Paper 88389, University Library of Munich, Germany.
    2. Elisabeth Bublitz & Kristian Nielsen & Florian Noseleit & Bram Timmermans, 2018. "Entrepreneurship, human capital, and labor demand: a story of signaling and matching," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(2), pages 269-287.
    3. Alexandra Tsvetkova & Mark Partridge, 2021. "Knowledge-based service economy and firm entry: an alternative to the knowledge spillover theory of entrepreneurship," Small Business Economics, Springer, vol. 56(2), pages 637-657, February.
    4. Javier Changoluisa, 2021. "The early development of new establishments: An evaluation of the role of spatial selection and agglomeration," Jena Economics Research Papers 2021-009, Friedrich-Schiller-University Jena.
    5. Stepan Zemtsov & Vladimir Eremkin & Vera Barinova, 2015. "Factors of Attractiveness of the Leading Russian Universities Overview of Literature and Econometric Analysis of the Leading Universities," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 4, pages 201-233.
    6. Michael Wyrwich & Michael Fritsch & Elisabeth Bublitz & Alina Sorgner, 2018. "GAW survey data linked with administrative data of the IAB (GAW-ADIAB): A documentation and review of empirical evidence and research opportunities," Jena Economics Research Papers 2018-017, Friedrich-Schiller-University Jena.
    7. Fritsch, Michael & Wyrwich, Michael & Bublitz, Elisabeth & Sorgner, Alina, 2015. "GAW-Befragungsdaten verknüpft mit administrativen Daten des IAB : (GAW-ADIAB) Datenreport zur Gründerbefragung des Projekts SFB 580 B10 "Gründungsgeschehen und Arbeitsmarkt in ost- und westdeutsc," FDZ Datenreport. Documentation on Labour Market Data 201505_de, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. repec:iab:iabfda:201505(de is not listed on IDEAS
    9. Tsvetkova, Alexandra, 2016. "Do diversity, creativity and localized competition promote endogenous firm formation? Evidence from a high-tech US industry," MPRA Paper 72349, University Library of Munich, Germany.
    10. Andrea Bonaccorsi & Daniele Biancardi & Mabel Sanchez Barrioluengo & Federico Biagi, 2019. "Study on Higher Education Institutions and Local Development," JRC Research Reports JRC117272, Joint Research Centre.

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    More about this item

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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