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The determinants of new‐firm survival across regional economies: The role of human capital stock and knowledge spillover

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  • Zoltan J. Acs
  • Catherine Armington
  • Ting Zhang

Abstract

Abstract. Motivated by differences in new‐firm survival across regions, this paper explores the impact of regional human capital on new‐firm survival rates. New‐firm survival is interpreted through formation rates of surviving versus closed firms in the service sector. By incorporating knowledge spillovers through a geographical variation model for Labour Market Areas, we empirically test the relationship between regional human capital stocks and new‐firm survival. The expected positive relationship between regional human capital and new‐firm survival is supported for the period 1993–1995, but is not as strong for the recession period 1990–1992. Controlling for human capital, the new‐firm survival rate is negatively related to service sector specialisation and positively related to all‐industry intensity, suggesting that city size and diversity may be an important determinant of new‐firm survival in both periods. Abstract. Motivado por las diferencias entre economías regionales en la supervivencia de nuevas empresas, este artículo explora el impacto del capital humano regional en las tasas de supervivencia de nuevas empresas. La supervivencia de nuevas empresas se interpreta a través de las tasas de formación de empresas supervivientes respecto de empresas que han cerrado en el sector servicios. Mediante la incorporación de spillovers (efectos derrame) de conocimiento en un modelo de variación geográfica para Áreas de Mercado Laboral, analizamos empíricamente la relación entre reservas de capital humano y la supervivencia de nuevas empresas. La esperada relación positiva entre el capital humano regional y la supervivencia de nuevas empresas es válida para el periodo 1993‐1995, pero no lo es tanto para el periodo de recesión 1990‐1992. Controlando la variable capital humano, la tasa de supervivencia de nuevas empresas esta relacionada negativamente con la especialización del sector servicios y positivamente relacionada a la intensidad del total de industrias, sugiriendo que el tamaño de la ciudad y la diversidad podría ser un factor determinante de la supervivencia de nuevas empresas en ambos periodos.

Suggested Citation

  • Zoltan J. Acs & Catherine Armington & Ting Zhang, 2007. "The determinants of new‐firm survival across regional economies: The role of human capital stock and knowledge spillover," Papers in Regional Science, Wiley Blackwell, vol. 86(3), pages 367-391, August.
  • Handle: RePEc:bla:presci:v:86:y:2007:i:3:p:367-391
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    File URL: https://doi.org/10.1111/j.1435-5957.2007.00129.x
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    1. Pei-Chou Lin & Deng-Shing Huang, 2006. "Technological Regimes and Firm Survival: Evidence across Sectors and over Time," IEAS Working Paper : academic research 06-A012, Institute of Economics, Academia Sinica, Taipei, Taiwan.
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