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The Determinants of Regional Variation in New Firm Formation

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  • Catherine Armington
  • Zoltan Acs

Abstract

While much of the literature on new firm formation in the 1980s was motivated by high levels of unemployment, much of the focus on new firm start-ups today is motivated by high technology. Using a new database we examine the role of human capital, training and education, and entrepreneurial environment on new firm formation. We find significant differences in new firm formation rates from industrial regions to technologically progressive regions. Variations in firm birth rates are explained by industrial density, population and income growth. These results are consistent with thick labour markets and localized knowledge spillovers. Alors que le chomage constituait le principal moteur de la documentation sur la creation d'entreprise dans les annees 80, de nos jours c'est plutot la nouvelle technologie qui en est le moteur. A partir d'une nouvelle base de donnees, cet article cherche a examiner le role du capital humain, de la formation et de l'education, et du milieu propice a la creation d'entreprise. Il s'avere d'importants ecarts dans les taux de creation d'entreprise entre les regions industrielles et les regions plus a la pointe de la technologie. La variation du taux de creation d'entreprise s'explique par la densite industrielle, la demographie et la croissance du revenu. Ces resultats-la correspondent aux notions de marches du travail forts et de retombees des connaissances localisees. Wahrend in den achtziger Jahren ein Grossteil der Literatur uber die Grundung neuer Firmen durch den hohen Grad der Erwerbslosigkeit veranlasst worden war, verdankt sie heute das Interesse an Firmengrundungen hauptsachlich der Hochtechnologie. Mit Hilfe einer neuen Datenbank werden die Einflusse von Menschenkapital, Ausbildung und Erziehung und einer unternehmerfreundlichen Umwelt auf Firmengrundungen untersucht. Es werden signifikante Unterschiede in den Raten neuer Firmengrundungen in Industriegebieten und technologisch fortschrittlichen Gebieten festgestellt. Schwankungen in Firmengrundungsraten finden ihre Erklarung in Industriedichte, Bevolkerung und Einkommensanstieg. Diese Ergebnisse stimmen mit starken Arbeitsmarkten und ortlich beschrankter Verbreitung von Kenntnisen uberein.

Suggested Citation

  • Catherine Armington & Zoltan Acs, 2002. "The Determinants of Regional Variation in New Firm Formation," Regional Studies, Taylor & Francis Journals, vol. 36(1), pages 33-45.
  • Handle: RePEc:taf:regstd:v:36:y:2002:i:1:p:33-45
    DOI: 10.1080/00343400120099843
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