The Influence of Creativity on Entrepreneurship: The Portuguese Case

Literature shows that a high level of new firm creation significantly contributes to regional economic performance and is a clear sign of a thriving economy; hence, the understanding of the factors promoting new firm formation is crucial for economic development. Typically, literature has shown the influence of several variables such as the unemployment rate or the population density on firms’ birth rate. A more recent approach has been suggesting that creativity is one of the factors promoting new firm formation and, thus, economic growth. Richard Florida’s The Rise of the Creative Class (2002) was a seminal contribution for the recognition of the importance of creative people, creative industries, creative economies, and, thus, creativity. Many authors, inspired by this contribution, have been undertaking theoretical and empirical studies to analyze the role of creativity in economics. The aim of this chapter is to follow such contributions, discussing the impact of creativity on entrepreneurship in Portugal. A multivariate linear regression analysis is applied, explaining new firm formation across Portuguese regions with explanatory variables that include both creativity and diversity indexes, innovation indicators and the human capital dimension, as well as other control variables. Our results show little evidence of the influence of creativity on the birth of new firms, while pointing to the relevance of agglomeration effects for new firms’ formation and to the difficulty of immigrants in establishing a firm.