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Local Competitiveness Fostered through Local Institutions for Entrepreneurship

Author

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  • Andersson, Martin

    () (Lund University)

  • Henrekson, Magnus

    () (Research Institute of Industrial Economics (IFN))

Abstract

We review and assess the role local institutional framework conditions play in fostering local entrepreneurship. The basic premise is that entrepreneurship is a central driver of economic renewal and change, and that institutions affect both the supply and direction of entrepreneurship. While local institutions always develop and operate against the backdrop of national institutional frameworks, in particular in non-federal states, our review shows that there is plenty of room for local initiatives and policies to influence the entrepreneurial climate locally. This pertains to both formal (e.g., taxes, regulations and stringency of enforcement) and informal (e.g., attitudes and social legitimacy) institutions. We further argue that the local institutional environment is essential in any local policy aimed to foster productive (high-impact) entrepreneurship. Favorable local institutions not only increase the odds that a region develops or manage to attract entrepreneurial incumbents, but also the odds that a region reaps the full potential of hosting entrepreneurial and knowledge-intensive activities.

Suggested Citation

  • Andersson, Martin & Henrekson, Magnus, 2014. "Local Competitiveness Fostered through Local Institutions for Entrepreneurship," Working Paper Series 1020, Research Institute of Industrial Economics.
  • Handle: RePEc:hhs:iuiwop:1020
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    References listed on IDEAS

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    Cited by:

    1. Henrekson, Magnus & Sanandaji, Tino, 2017. "Schumpeterian Entrepreneurship in Europe Compared to Other Industrialized Regions," Working Paper Series 1170, Research Institute of Industrial Economics.

    More about this item

    Keywords

    Business climate; Entrepreneurship; Institutions; Job creation; Local policies; Startups; Regulations; Entrepreneurship culture;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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