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Regional dynamics and start-ups: Evidence from French departments in 2011

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  • Nadine Levratto
  • Denis Carré

Abstract

This paper seeks to determine the exact role played by regional dynamics in the creation of companies. The notion that territorial dynamics influence entrepreneurial activity seems to be backed up, first of all, by the fact that it is at the regional level that the direct influence of the ecosystem of wealth and of material, human and organizational resources is strengthened through agglomeration effects. We empirically address this question considering the case of French departments in 2011. In order to take into account the role played by the neighbourhood and the resulting spatial dependence, we estimate the sensitivity of both the overall entry rate and the entry rate in the manufacturing industry using spatial econometric estimation techniques, an approach which enables us to control the effect of spatial autocorrelation. Our results show that the creation of companies highly depends on local factors and that the source of local dependence differs according to the entry rate used as an explained variable. Whereas a spatial lag applies at the overall level, the creation of companies in the manufacturing industry is more oriented by exogenous shocks so that a spatial error model is more appropriate.

Suggested Citation

  • Nadine Levratto & Denis Carré, 2014. "Regional dynamics and start-ups: Evidence from French departments in 2011," EconomiX Working Papers 2014-45, University of Paris Nanterre, EconomiX.
  • Handle: RePEc:drm:wpaper:2014-45
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    References listed on IDEAS

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    1. Pontus Braunerhjelm & Ding Ding & Per Thulin, 2018. "The knowledge spillover theory of intrapreneurship," Small Business Economics, Springer, vol. 51(1), pages 1-30, June.
    2. Martin Koning & Marie-Estelle Binet & François Facchini, 2010. "Les déterminants de la dynamique entrepreneuriale dans les régions françaises (1994-2003)," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00467900, HAL.
    3. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    4. Marie-Estelle Binet & François Facchini & Martin Koning, 2011. "Les déterminants de la dynamique entrepreneuriale dans les régions françaises," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00630442, HAL.
    5. Thomas de Graaff & Kees van Montfort & Peter Nijkamp, 2006. "Spatial Effects and Non-Linearity in Spatial Regression Models: Simulation Results for Several Misspecification Tests," Chapters,in: Spatial Dynamics, Networks and Modelling, chapter 5 Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    entrepreneurship; entry rate; spatial dependence; French departments;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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