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Growth of Incumbent Firms and Entrepreneurship in Vietnam

  • E. Santarelli
  • H. T. Tran

This paper analyzes the relationship between the performance of incumbent firms and the net entry of new firms by combining different theoretical views of entrepreneurship. It shows that new knowledge and ideas created but not commercialized by incumbents are an important source of entrepreneurial opportunities for nascent firms. Different regression models to treat dynamics and endogeneity issues are applied to test the research hypothesis that growth of incumbent firms in a region will stimulate start-up activities by creating new profit opportunities for potential entrepreneurs. Vietnam’s regional micro-data from 2000 to 2008 are used for this test. Four controlling indicators – entrepreneurial demand, market structure, regional economic environment, and market innovativeness – are found to exert a statistically significant effect on new entries.

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Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number wp785.

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Date of creation: Sep 2011
Date of revision:
Handle: RePEc:bol:bodewp:wp785
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  4. Reinhold Grotz & Udo Brixy, 2003. "Regional Patterns and Determinants of the Success of New Firms in Western Germany," ERSA conference papers ersa03p270, European Regional Science Association.
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  7. Michael Fritsch, 2008. "How does new business formation affect regional development? Introduction to the special issue," Small Business Economics, Springer, vol. 30(1), pages 1-14, January.
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  10. 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.
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  16. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
  17. Santarelli, Enrico & Vivarelli, Marco, 2006. "Entrepreneurship and the Process of Firms’ Entry, Survival and Growth," IZA Discussion Papers 2475, Institute for the Study of Labor (IZA).
  18. Hausmann, Ricardo & Rodrik, Dani, 2002. "Economic Development as Self Discovery," CEPR Discussion Papers 3356, C.E.P.R. Discussion Papers.
  19. S. Klepper & S. Sleeper, 2002. "Entry by Spinoffs," Papers on Economics and Evolution 2002-07, Philipps University Marburg, Department of Geography.
  20. Giovanni Dosi & Luigi Marengo, 1999. "On the tangled discourse between transaction costs economics and competence-based views of the firms: Some comments," LEM Papers Series 1999/08, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  21. Levesque, Moren & Shepherd, Dean A., 2004. "Entrepreneurs' choice of entry strategy in emerging and developed markets," Journal of Business Venturing, Elsevier, vol. 19(1), pages 29-54, January.
  22. Pamela Mueller, 2007. "Exploiting Entrepreneurial Opportunities: The Impact of Entrepreneurship on Growth," Small Business Economics, Springer, vol. 28(4), pages 355-362, April.
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