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Location Attributes and Start-Ups in Knowledge Intensive Business Services

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  • Andersson, Martin

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Hellerstedt, Karin

    () (JIBS and Centre for Innovation Systems, Entrepreneurship and Growth (CISEG))

Abstract

We study start-ups in Knowledge Intensive Business Services (KIBS) across regions in Sweden by individuals with a formally recognized capacity to produce and develop advanced business services. The empirical analysis is based on a theoretical framework which emphasizes both supply- and demand-side factors. Supply-side variables pertain to accessibility to knowledge and information upon which a new firm can be established. Demand-side variables refer to market-size and pertain to the ability to recover fixed start-up costs and economize on costs associated with face-to-face interaction. 78 percent of the KIBS founders have prior work experience from business services, suggesting that KIBS start-ups are more frequent in regions where the KIBS sector is already large. Controlling for the stock of potential entrepreneurs and the stock KIBS firms, we show that both supply- and demand-side factors influence KIBS start-up activity. Results are consistent with that KIBS start-ups are stimulated by the simultaneous presence of (i) knowledge resources conducive for the generation and diffusion of knowledge and ideas upon which new firms can be established and (ii) a large market. The findings suggest that the geography of KIBS is shaped in cumulative and self-reinforcing processes, and can explain the tendency of KIBS firms to agglomerate in large city-regions.

Suggested Citation

  • Andersson, Martin & Hellerstedt, Karin, 2008. "Location Attributes and Start-Ups in Knowledge Intensive Business Services," Working Paper Series in Economics and Institutions of Innovation 116, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0116
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    Cited by:

    1. Chee-Yang Fong & Keng-Boon Ooi & Boon-In Tan & Voon-Hsien Lee & Alain Yee-Loong Chong, 2011. "HRM practices and knowledge sharing: an empirical study," International Journal of Manpower, Emerald Group Publishing, vol. 32(5/6), pages 704-723, August.
    2. Tobias Scholl & Thomas Brenner & Martin Wendel, 2016. "Evolving localization patterns of company foundationsEvidence from the German MST-industry," Journal of Evolutionary Economics, Springer, vol. 26(5), pages 1067-1087, December.
    3. Shaoming Cheng & Huaqun Li, 2012. "New firm formation facing cultural and racial diversity," Papers in Regional Science, Wiley Blackwell, vol. 91(4), pages 759-774, November.
    4. Michael Wyrwich, 2011. "Knowledge intensive Entrepreneurship across regions: Makes being a new industry a difference?," ERSA conference papers ersa11p1711, European Regional Science Association.
    5. Urban Gråsjö & Charlie Karlsson, 2014. "Accessibility: an underused analytical and empirical tool in spatial economics," Chapters,in: Accessibility and Spatial Interaction, chapter 11, pages 211-236 Edward Elgar Publishing.
    6. Belal Fallah & Mark D. Partridge & Dan S. Rickman, 2014. "Geography and High-Tech Employment Growth in US Counties," Journal of Economic Geography, Oxford University Press, vol. 14(4), pages 683-720.
    7. Johan Klaesson & Therese Norman, 2015. "Market potential and the employment growth of knowledge-intensive services: comparing different geographical resolutions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(1), pages 157-185, October.
    8. Kent Eliasson & Hans Westlund, 2013. "Attributes influencing self-employment propensity in urban and rural Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(2), pages 479-514, April.
    9. Mercedes Rodriguez & José Antonio Camacho, 2011. "The Regional distribution of Knowledge-Intensive Business Services in Europe: a spatial approach," ERSA conference papers ersa10p277, European Regional Science Association.
    10. Pontus Braunerhjelm & Ding Ding & Per Thulin, 2016. "Labour as a knowledge carrier: how increased mobility influences entrepreneurship," The Journal of Technology Transfer, Springer, vol. 41(6), pages 1308-1326, December.
    11. Olga V. Kotomina, 2015. "Spatial Dimension of Knowledge Intensive Business Services in Russia," HSE Working papers WP BRP 50/STI/2015, National Research University Higher School of Economics.
    12. Sam Tavassoli & Viroj Jienwatcharamongkhol, 2016. "Survival of entrepreneurial firms: the role of agglomeration externalities," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 28(9-10), pages 746-767, October.
    13. Dan Rickman & Belal Fallah & Mark Partridge, 2011. "Geographic Determinants of Hi-Tech Employment Growth in U.S. Counties," ERSA conference papers ersa11p518, European Regional Science Association.
    14. Martinsson, Gustav, 2008. "The Impact of Firm Collateral on Knowledge Intensive Consulting Firms," Working Paper Series in Economics and Institutions of Innovation 135, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    15. repec:elg:eechap:14395_27 is not listed on IDEAS
    16. repec:elg:eechap:14395_20 is not listed on IDEAS
    17. Andersson, Martin & Baltzopoulos, Apostolos & Lööf, Hans, 2012. "R&D strategies and entrepreneurial spawning," Research Policy, Elsevier, vol. 41(1), pages 54-68.
    18. Baltzopoulos, Apostolos, 2009. "The Firm and the Region as Breeding Grounds for Entrepreneurs," Working Paper Series in Economics and Institutions of Innovation 189, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    19. Shaoming Cheng & Huaqun Li, 2011. "Spatially Varying Relationships of New Firm Formation in the United States," Regional Studies, Taylor & Francis Journals, vol. 45(6), pages 773-789.
    20. Ana Condeço-Melhorado & Aura Reggiani & Javier Gutiérrez (ed.), 2014. "Accessibility and Spatial Interaction," Books, Edward Elgar Publishing, number 15267, April.
    21. Charlie Karlsson, 2012. "Entrepreneurship, social capital, governance and regional economic development: an introduction," Chapters,in: Entrepreneurship, Social Capital and Governance, chapter 1, pages 1-26 Edward Elgar Publishing.
    22. Niccolò Ghio & Massimiliano Guerini & Erik Lehmann & Cristina Rossi-Lamastra, 2015. "The emergence of the knowledge spillover theory of entrepreneurship," Small Business Economics, Springer, vol. 44(1), pages 1-18, January.

    More about this item

    Keywords

    knowledge intensive business services; knowledge spillovers; start-ups; entrepreneurship; location;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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