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Location determinants of high-growth firms

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Listed:
  • Minghao Li
  • Stephan J. Goetz
  • Mark Partridge
  • David A. Fleming

Abstract

County-level location patterns of INC5000 companies provide one map of American entrepreneurship and innovativeness, and understanding the local factors associated with these firms’ emergence is important for stimulating regional economic growth and innovation. We draw on the knowledge spillover theory of entrepreneurship to motivate our regression model, and augment this theory with additional regional features that have been found to be important in the firm location literature. Zero-inflated negative binomial regressions indicate that these firms exist in counties with larger average establishment size, higher educational attainment and more natural amenities. Income growth, a mix of higher paying industries, and more banks per capita are associated with a smaller presence of these types of firms, all else equal. We conclude that the local conditions favouring high-growth firms are likely to be different from those favouring new firms in general, and that these conditions differ significantly in urban and rural areas and by industrial sectors.

Suggested Citation

  • Minghao Li & Stephan J. Goetz & Mark Partridge & David A. Fleming, 2016. "Location determinants of high-growth firms," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 28(1-2), pages 97-125, January.
  • Handle: RePEc:taf:entreg:v:28:y:2016:i:1-2:p:97-125
    DOI: 10.1080/08985626.2015.1109003
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    1. Cheratian, Iman & Goltabar, Saleh & Calá, Carla Daniela, 2019. "Spatial drivers of firm entry in Iran," Nülan. Deposited Documents 3058, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    2. Daire McCoy & Sean Lyons & Edgar Morgenroth & Donal Palcic & Leonie Allen, 2018. "The impact of broadband and other infrastructure on the location of new business establishments," Journal of Regional Science, Wiley Blackwell, vol. 58(3), pages 509-534, June.
    3. S. R. Khalimova & A. T. Yusupova, 2020. "Influence of Regional Conditions on the Development of High-Tech Companies in Russia," Regional Research of Russia, Springer, vol. 10(3), pages 308-317, July.
    4. Fleming, David & Komarek, Timothy & Partridge, Mark & Measham, Thomas, 2015. "The Booming Socioeconomic Impacts of Shale: A Review of Findings and Methods in the Empirical Literature," MPRA Paper 68487, University Library of Munich, Germany.
    5. Philip Chen & Edward J Oughton & Pete Tyler & Mo Jia & Jakub Zagdanski, 2020. "Evaluating the impact of next generation broadband on local business creation," Papers 2010.14113, arXiv.org.
    6. Bruno Fischer & Paola Rücker Schaeffer & Sérgio Queiroz, 2019. "High-growth entrepreneurship in a developing country: Regional systems or stochastic process?," Contaduría y Administración, Accounting and Management, vol. 64(1), pages 59-60, Enero-Mar.
    7. Goetz, Stephen & Partridge, Mark & Stephens, Heather, 2017. "The Economic Status of Rural America in the Trump Era," MPRA Paper 77830, University Library of Munich, Germany.
    8. Goetz, Stephan J. & Han, Yicheol, 2020. "Latent innovation in local economies," Research Policy, Elsevier, vol. 49(2).

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    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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