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Regional Institutional Environment and Swedish Regional New Firm Formation

  • Nyström, Kristina


    (Division of Economics KTH and Ratio Institute)

This paper uses an institutional approach to investigate the relationship between the regional institutional environment and regional new firm formation. The importance of perceived attitudes regarding private enterprises, local taxes, political majority, the size of the government sector and perceived rules and bureaucracy on new firm formation in 286 Swedish municipalities are investigated. The empirical findings show that perceived positive attitudes toward private enterprises and political governance by a right bloc majority tend to have positive effects on regional new firm formation. A large local government sector, on the other hand, tends to have negative effects on regional new firm formation. The paper also explore if the effect of different aspects of regional institutional environment on new firm formation are similar across industries. The pattern in the private service sector industries is most similar to the overall pattern in the economy, while the only variable reflecting the regional institutional environment that influences new firm formation in manufacturing industries is perceived rules and bureaucracy.

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Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 142.

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Length: 36 pages
Date of creation: 09 Sep 2008
Date of revision:
Handle: RePEc:hhs:cesisp:0142
Contact details of provider: Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
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