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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.

Suggested Citation

  • Nyström, Kristina, 2008. "Regional Institutional Environment and Swedish Regional New Firm Formation," Working Paper Series in Economics and Institutions of Innovation 142, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0142

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    References listed on IDEAS

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    Cited by:

    1. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.

    More about this item


    institutions; new firm formation; regions;

    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

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