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The Localization of Entrepreneurship Capital - Evidence from Germany


  • David B. Audretsch

    (Max Planck Institute of Economics, Jena, Germany; Indiana University, USA)

  • Max Keilbach

    (Max Planck Institute of Economics, Jena, Germany)


Whereas initially physical capital and later, knowledge capital were viewed as crucial for growth, more recently a very different factor, entrepreneurship capital, has emerged as a driving force of economic growth. In this paper, we define a region's capacity to create new firms start-ups as the region's entrepreneurship capital. We then investigate the local embeddedness of this variable and which variables have an impact on this variable. Using data for Germany, we find that knowledge-based entrepreneurship capital is driven by local levels of knowledge creation and the acceptance of new ideas, indicating that local knowledge flows play an important role. Low-tech entrepreneurship capital is rather increased by regional unemployment and driven by direct incentives such as subsidies. All three measures are locally clustered, indicating that indeed, entrepreneurship capital is a phenomenon that is driven by local culture, and is therefore locally bounded.

Suggested Citation

  • David B. Audretsch & Max Keilbach, 2007. "The Localization of Entrepreneurship Capital - Evidence from Germany," Jena Economic Research Papers 2007-029, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2007-029

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    Cited by:

    1. Zheng, Liang & Zhao, Zhong, 2017. "What drives spatial clusters of entrepreneurship in China? Evidence from economic census data," China Economic Review, Elsevier, vol. 46(C), pages 229-248.
    2. Pinto, Hugo & Cruz, Ana & Gonçalves, Ana, 2011. "Hard Working Ant: An Eco-Tourism Spin-Off Creation Tale," Spatial and Organizational Dynamics Discussion Papers 2011-11, CIEO-Research Centre for Spatial and Organizational Dynamics, University of Algarve.
    3. Schwartz, Michael & Hornych, Christoph, 2008. "Technologie- und Gründerzentren im Lichte von Diversifizierung versus Spezialisierung," IWH Discussion Papers 7/2008, Halle Institute for Economic Research (IWH).
    4. Bologna, Jamie, 2014. "A Spatial Analysis of Entrepreneurship and Institutional Quality: Evidence from U.S. Metropolitan Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 44(2).
    5. repec:eee:respol:v:47:y:2018:i:1:p:139-157 is not listed on IDEAS
    6. Alessandra Colombelli & Francesco Quatraro, 2013. "New Firm Formation and the properties of local knowledge bases: Evidence from Italian NUTS 3 regions," Working Papers hal-00858989, HAL.
    7. Jean Bonnet & Sébastien Bourdin & Fatten Gazzah, 2017. "The entrepreuneurial context, a factor of Economic Growth in the Europe Union? A GWR analysis on the EU Regions," Working Papers halshs-01619798, HAL.
    8. Johannes Dick & Katrin Hussinger & Boris Blumberg & John Hagedoorn, 2013. "Is success hereditary? Evidence on the performance of spawned ventures," Small Business Economics, Springer, vol. 40(4), pages 911-931, May.
    9. Frank M. Fossen & Thorsten Martin, 2016. "Entrepreneurial Spillovers over Space and Time," Discussion Papers of DIW Berlin 1618, DIW Berlin, German Institute for Economic Research.
    10. 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.
    11. Joana Mendonça & Christoph Grimpe, 2016. "Skills and regional entrepreneurship capital formation: a comparison between Germany and Portugal," The Journal of Technology Transfer, Springer, vol. 41(6), pages 1440-1456, December.
    12. Sven-Olov Daunfeldt & Niklas Elert & Niklas Rudholm, 2013. "Start-ups and firm in-migration: evidence from the Swedish wholesale industry," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 479-494, October.
    13. Taheri, Mozhdeh & van Geenhuizen, Marina, 2016. "Teams' boundary-spanning capacity at university: Performance of technology projects in commercialization," Technological Forecasting and Social Change, Elsevier, vol. 111(C), pages 31-43.
    14. Nabamita Dutta & Russell Sobel, 2016. "Does corruption ever help entrepreneurship?," Small Business Economics, Springer, vol. 47(1), pages 179-199, June.
    15. Aparicio, Sebastian & Urbano, David & Audretsch, David, 2016. "Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 45-61.
    16. Cumming, Douglas & Li, Dan, 2013. "Public policy, entrepreneurship, and venture capital in the United States," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 345-367.
    17. Túlio A. Cravo, 2010. "SMEs and economic growth in the Brazilian micro-regions," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 711-734, November.
    18. Alessandra Colombelli, 2016. "The impact of local knowledge bases on the creation of innovative start-ups in Italy," Small Business Economics, Springer, vol. 47(2), pages 383-396, August.
    19. Cole, Rebel & Cumming, Douglas & Li, Dan, 2016. "Do banks or VCs spur small firm growth?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 41(C), pages 60-72.
    20. Cumming, Douglas & Werth, Jochen Christian & Zhang, Yelin, 2016. "Governance in entrepreneurial ecosystems: Venture capitalists vs. technology parks," SAFE Working Paper Series 135, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.
    21. Christian Hundt & Rolf Sternberg, 2016. "Explaining new firm creation in Europe from a spatial and time perspective: A multilevel analysis based upon data of individuals, regions and countries," Papers in Regional Science, Wiley Blackwell, vol. 95(2), pages 223-257, June.
    22. Claus Michelsen & Harald Wolf & Michael Schwartz, 2013. "Regional Entrepreneurial Opportunities in the Biotech Industry: Exploring the Transition from Award-Winning Nascent Entrepreneurs to Real Start-Ups," European Planning Studies, Taylor & Francis Journals, vol. 21(11), pages 1708-1734, November.
    23. Niccolò Ghio & Massimiliano Guerini & Erik Lehmann & Cristina Rossi-Lamastra, 2015. "The emergence of the knowledge spillover theory of entrepreneurship," Small Business Economics, Springer, vol. 44(1), pages 1-18, January.

    More about this item


    Entrepreneurship capital; Local Clusters; Knowledge Spillovers; Spatial Econometrics;

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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