Cycling as Critical Infrastructure for Green Start-Ups: A Multilevel Analysis in Germany

Despite physical infrastructure being known as a critical enabler of entrepreneurship, cycling infrastructure and its role in entrepreneurship remain largely unexplored. However, a well-established cycling infrastructure can support green start-up activity by facilitating connectivity and the exchange of knowledge and ideas without the reliance on carbon-intensive transport, which aligns with their environmental goals. This article studies the relationship between cycling infrastructure and green start-up activity at the regional (NUTS-3) level in Germany and whether this relationship is amplified by the wider entrepreneurial ecosystem (EE). This study is virtually the first to examine how a well-established cycling infrastructure is conducive to start-up activity. With firm-level data from the IAB/ZEW Start-up Panel, multilevel regression models are used to account for differences in green start-up activity across urban, intermediate, and rural regions. The findings show a strong significant and positive relationship between cycling infrastructure and green start-up activity at the regional level, even after including various controls. However, this relationship is not amplified by the wider ecosystem. In the transition towards a Green Economy, policymakers should invest in cycling infrastructure because of its supportive role towards green start-ups.