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Regional variations in firm formation: Panel and cross†section data evidence from Finland**This study was part of a research project funded by the Academy of Finland. I would like to thank three anonymous referees, and Sari Pekkala, Antti Moisio, Heikki A. Loikkanen, Hannu Tervo and Jaakko Pehkonen for valuable discussions and comments. This article is a revised version of the paper that was awarded the 1998 Epainos Prize

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  • Kangasharju, Aki

Abstract

This article investigates regional variations in firm formation in Finland between 1989 and 1993, and estimates the effects of regional factors on firm formation utilising panel and cross†sectional data. Panel data evidence shows that the average size of firms and establishments in the subregions tends to explain firm formation in Finland most robustly. Cross†sectional results for Finland and several other countries tend to show that demand growth is also an important factor explaining regional firm formation. Panel data results appear to differ from the cross†sectional ones.

Suggested Citation

Handle: RePEc:eee:paresc:v:79:y:2000:i:4:p:355-373
DOI: 10.1111/j.1435-5597.2000.tb01762.x
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Keywords

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JEL classification:

  • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
  • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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