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What determines entry? Evidence from Sweden

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Abstract

In the literature concerning the geography of new firm formation, explanatory variables pertaining to industrial organization and political economy are seldom considered. Such variables were thus included when investigating what conditions influenced entry of Swedish limited liability firms during 2000-2008, using data that make it possible to trace entry geographically as well as in what industry it occurs down to the five-digit NACE-level. To deal with overdispersion in the data, a negative binomial regression model was estimated. Political variables, e.g., municipal tax rate and the ideology of local rule, were found to be of limited importance, whereas industry-specific conditions seem to have affected entry. Municipalities with industries with high minimum efficient scale of production or high market concentration rates were considerably less likely to see new firm formation. Substantially more entry occurred in municipalities with high income and a well-educated population.

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  • Elert, Niklas, 2012. "What determines entry? Evidence from Sweden," Ratio Working Papers 195, The Ratio Institute.
  • Handle: RePEc:hhs:ratioi:0195
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    Cited by:

    1. Brixiova, Zuzana & Égert, Balázs, 2017. "Entrepreneurship, institutions and skills in low-income countries," Economic Modelling, Elsevier, vol. 67(C), pages 381-391.
    2. Arauzo Carod, Josep Maria & Coll Martínez, Eva & Turcu, Camelia, 2018. "Where New Creative Industries Locate? Evidence from French Departments," Working Papers 2072/307042, Universitat Rovira i Virgili, Department of Economics.
    3. Elert, Niklas & Henrekson, Magnus & Stenkula, Mikael, 2017. "Institutional Reform for Innovation and Entrepreneurship: An Agenda for Europe," Working Paper Series 1150, Research Institute of Industrial Economics, revised 16 Feb 2017.

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    Keywords

    Entry; entrepreneurship; regional economics; count data; firm formation;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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