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Personal and Regional Determinants of Entrepreneurial Activities: Empirical Evidence from the REM Germany

Author

Listed:
  • Wagner, Joachim

    (Leuphana University Lüneburg)

  • Sternberg, Rolf

    (University of Cologne)

Abstract

This paper contributes to empirical research in entrepreneurship by focusing on the link between two stylized facts that emerged from a number of studies for Germany and other countries: Entry rates differ between regions, and the propensity to become an entrepreneur is influenced by socio-demographic variables and attitudes. We develop a theoretical framework to discuss this link, and we test whether for a person of a given age, degree of schooling, attitude towards risk etc. regional variables do matter for the decision to start a new business ceteris paribus. Our econometric study is based on data for 10.000 persons from a recent representative survey of the population in ten German planning regions, the Regional Entrepreneurship Monitor (REM). We use a version of the probit model that takes care of the regional stratification of the data, and the results of the nonlinear models are carefully interpreted and illustrated. We find that the propensity to step into self-employment is, among others, higher for males, unemployed, people with contacts to a role model, and with past entrepreneurial experience, who live in more densely populated and faster growing regions with higher rates of new firm formation, while risk aversion and high prices of land have the opposite impact.

Suggested Citation

  • Wagner, Joachim & Sternberg, Rolf, 2002. "Personal and Regional Determinants of Entrepreneurial Activities: Empirical Evidence from the REM Germany," IZA Discussion Papers 624, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp624
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    References listed on IDEAS

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    1. Fritsch, Michael & Falck, Oliver, . "New firm formation by industry over space and time: a multi-level analysis for Germany," Chapters in Economics,, University of Munich, Department of Economics.
    2. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    3. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-748, August.
    4. David Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 113-124.
    5. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
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    Cited by:

    1. Constant, Amelie F. & Shachmurove, Yochanan & Zimmermann, Klaus F., 2003. "What Makes an Entrepreneur and Does It Pay? Native Men, Turks, and Other Migrants in Germany," IZA Discussion Papers 940, IZA Network @ LISER.
    2. John Armour & Douglas Cumming, 2008. "Bankruptcy Law and Entrepreneurship," American Law and Economics Review, American Law and Economics Association, vol. 10(2), pages 303-350.
    3. Joern H. Block & Marcus Wagner, 2010. "Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earning s Differentials," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 62(2), pages 154-174, April.
    4. Amelie Constant & Yochanan Shachmurove, 2006. "Entrepreneurial ventures and wage differentials between Germans and immigrants," International Journal of Manpower, Emerald Group Publishing Limited, vol. 27(3), pages 208-229, April.
    5. Sjoerd Beugelsdijk, 2010. "Entrepreneurial Culture, Regional Innovativeness and Economic Growth," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 129-154, Springer.
    6. Block, Joern & Sandner, Philipp, 2006. "The Effect of Motivation on Self-Employment Duration in Germany: Necessity versus Opportunity Entrepreneurs," MPRA Paper 215, University Library of Munich, Germany.

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    Keywords

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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • 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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