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State-Level Determinants of Entrepreneurship and a Preliminary Measure of Entrepreneurial Climate

Author

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  • Stephan J. Goetz

    (Pennsylvania State University)

  • David Freshwater

    (University of Kentucky)

Abstract

State and local governments increasingly look to entrepreneurship as a means of stimulating economic growth. However, can the public sector play a role in promoting entrepreneurial activity—and if so, what should that role be? The authors investigate independent effects of financial and human entrepreneurial capital and ideas on entrepreneurial activity in the 50 states. Financial entrepreneurial capital has an inverse U-shaped relationship with entrepreneurial activity, suggesting there are limits to using increasing amounts of financial capital to stimulate entrepreneurship, all else being equal. The authors rank each state in terms of predicted and actual entrepreneurial activity scores and propose a preliminary measure of the entrepreneurial “climate†of each state. Although most states are ranked near where casual analysis might place them, the authors find that others have predicted values that differ significantly from actual values. This suggests that climate may be an important factor in stimulating entrepreneurial activity.

Suggested Citation

  • Stephan J. Goetz & David Freshwater, 2001. "State-Level Determinants of Entrepreneurship and a Preliminary Measure of Entrepreneurial Climate," Economic Development Quarterly, , vol. 15(1), pages 58-70, February.
  • Handle: RePEc:sae:ecdequ:v:15:y:2001:i:1:p:58-70
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    Cited by:

    1. Barkley, David L., 2008. "Evaluations of Regional Competitiveness: Making a Case for Case Studies," The Review of Regional Studies, Southern Regional Science Association, vol. 38(2), pages 121-143.
    2. Willis, David B. & Boys, Kathryn A. & Hughs, David W. & Swindall, Devin C., 2012. "Evaluating the Determinants of Self-Employed Income Across Regional Economies: A Case-Study of the U.S. Southeast," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124912, Agricultural and Applied Economics Association.
    3. Shrestha, Sundar S. & Goetz, Stephan J. & Rupasingha, Anil, 2007. "Proprietorship Formations and U.S. Job Growth," The Review of Regional Studies, Southern Regional Science Association, vol. 37(2), pages 146-168.
    4. Goetz, Stephan J., 2003. "Critical Development Issues In Rural Economies," Agricultural Outlook Forum 2003 33199, United States Department of Agriculture, Agricultural Outlook Forum.
    5. Maribel Mojica & Tesfa Gebremedhin & Peter Schaeffer, 2009. "A County-Level Assessment of Entrepreneurship and Economic Growth in Appalachia Using Simultaneous Equations," Working Papers Working Paper 2009-04, Regional Research Institute, West Virginia University.
    6. Olfert, R. & Berdegué, J. & Escobal, J. & Jara, B. & Modrego, F., 2011. "Places for Place-Based Policies," Working papers 079, Rimisp Latin American Center for Rural Development.
    7. repec:rri:wpaper:200902 is not listed on IDEAS
    8. Maribel Mojica & Tesfa Gebremedhin & Peter Schaeffer, 2009. "An Empirical Analysis of the Link between Entrepreneurship and Economic Growth in West Virginia," Working Papers Working Paper 2009-02, Regional Research Institute, West Virginia University.
    9. repec:rri:wpaper:200904 is not listed on IDEAS
    10. whitney Oliver Peake & Maria I. Marshall, 2006. "What Do We Really Know About Entrepreneurs? An Analysis Of Nascent Entrepreneurs In Indiana," Working Papers 06-14, Purdue University, College of Agriculture, Department of Agricultural Economics.
    11. Yoon Lee & Maria Marshall, 2013. "Goal Orientation and Performance of Family Businesses," Journal of Family and Economic Issues, Springer, vol. 34(3), pages 265-274, September.
    12. Sooriyakumar Krishnapillai & Henry Kinnucan, 2012. "The Impact Of Automobile Production On The Growth Of Non-Farm Proprietor Densities In Alabama'S Counties," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 37(3), pages 25-46, September.
    13. Faggian, Alessandra & Partridge, Mark & Malecki, Ed, 2016. "Creating an environment for economic growth: creativity, entrepreneurship or human capital?," MPRA Paper 71445, University Library of Munich, Germany.
    14. repec:bla:coecpo:v:35:y:2017:i:4:p:700-715 is not listed on IDEAS

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