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Who’s got the aces up his sleeve? Functional specialization of cities and entrepreneurship

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  • David Audretsch

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  • Oliver Falck

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  • Stephan Heblich

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Abstract

This paper combines the empirical finding of a functional specialization of cities with regional dynamics.We distinguish between cities dominated by headquarters and service firms (urban agglomerations), those with large stand-alone production plants in one sector (industrial agglomerations), and cities with integrated smaller firms (industrial districts). Based on German data, we find differing dynamics across these three city types. Cities that host basic research or integrated incumbents are more conducive to entrepreneurial activity,whereas the opposite is true of industrial agglomerations. Urban agglomerations dominated by headquarters with only administrative functions and the service sector are not very entrepreneur-friendly, either. However, although this type of city provides few externalities for startups in manufacturing, they could very well provide opportunities for service sector startups.
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Suggested Citation

  • David Audretsch & Oliver Falck & Stephan Heblich, 2011. "Who’s got the aces up his sleeve? Functional specialization of cities and entrepreneurship," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 621-636, June.
  • Handle: RePEc:spr:anresc:v:46:y:2011:i:3:p:621-636
    DOI: 10.1007/s00168-009-0353-0
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. repec:spr:chfecr:v:4:y:2016:i:1:d:10.1186_s40589-016-0033-z is not listed on IDEAS
    2. G. F. Gori, 2013. "Urban Functional Specialisation and the Interplay between Firm’s Communication Costs," Working Papers wp877, Dipartimento Scienze Economiche, Universita' di Bologna.
    3. Oliver Falck & Stephan Heblich & Stefan Kipar, 2011. "Incumbent innovation and domestic entry," Small Business Economics, Springer, vol. 36(3), pages 271-279, April.
    4. Neil Lee & Andrés Rodríguez-Pose, 2014. "Innovation in Creative Cities: Evidence from British Small Firms," Industry and Innovation, Taylor & Francis Journals, vol. 21(6), pages 494-512, August.
    5. repec:bla:growch:v:48:y:2017:i:3:p:297-312 is not listed on IDEAS
    6. Stefan Kipar, 2012. "Determinants of Firm Innovation - Evidence from German Panel Data," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 45.
    7. Hundt Christian & Sternberg Rolf, 2014. "How Did the Economic Crisis Influence New Firm Creation?: A Multilevel Approach Based Upon Data from German Regions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(6), pages 722-756, December.
    8. Neil Lee & Andrés Rodríguez-Pose, 2014. "Innovation in creative cities: Evidence from British small firms," Papers in Evolutionary Economic Geography (PEEG) 1422, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2014.
    9. Nadine LEVRATTO & Denis CARRÉ, 2013. "La Croissance Des Établissements Industriels : Une Question De Localisation," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 93-120.

    More about this item

    Keywords

    O18; R11; R12;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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