The Start-Up Location Decision and Regional Determinants

An important stream of literature in the past 20 years focuses on the impact of new firm formation, i.e., entrepreneurship, for the economic development of regions and nations. Addressing the importance of small business and new firm formation for economic growth (Audretsch 1995), a considerable outpouring of literature presented empirical evidence criticizing (Robson 1996) or confirming the “job generation process” theory and resulted in putting entrepreneurship at the forefront of research in an so-called “entrepreneurial” economy (Audretsch and Thurik 2000). The phenomenon of entrepreneurship is examined at various levels of analysis, such as individuals, firms, regions, or nations (Wennekers and Thurik 1999). Davidson and Wiklund (2001) argue that entrepreneurship research is dominated by micro-level analysis, mainly using the firm or the individual level of analysis. Reviewing nine peer-reviewed entrepreneurship journals, Chandler and Lyon (2001) find that only a small part of research designs focuses on the industry or macro-environment level. Davidson and Wiklund (2001) observe that the micro-level dominance increased over time, while the share of the aggregate level declined. Ucbasaran et al. (2001) call for more research on the existence of different and contrasting environmental conditions for entrepreneurship (see also Thurik 2009). But while the challenge of explaining how and why new firms emerge in regions or socioeconomic contexts raised much debate and resulted in an increasing body of literature, a certain number of gaps prevail.