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Balanced Skills and the City: An Analysis of the Relationship between Entrepreneurial Skill Balance, Thickness and Innovation

  • Elisabeth Bublitz

    ()

    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

  • Michael Fritsch

    ()

    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

  • Michael Wyrwich

    ()

    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

Being a "jack-of-all-trades" increases the probability of running an entrepreneurial venture successfully; but what happens to "jack-of-few-trades" who lack sufficient skills? This paper investigates a possible compensation mechanism between balanced skills and cities, and how this compensatory measure relates to performance. Specifically, we test and find support for the idea put forward by Helsley and Strange (2011) that high market thickness, such as that found in cities, can compensate for a lack of entrepreneurial skill balance. The results indicate that entrepreneurs with low skill balance benefit more from locating in cities than their counterparts with high skill balance. Innovative firms do not differ from other businesses in this respect.

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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2013-010.

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Date of creation: 26 Feb 2013
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Handle: RePEc:jrp:jrpwrp:2013-010
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  1. Bosma, Niels & Hessels, Jolanda & Schutjens, Veronique & Praag, Mirjam Van & Verheul, Ingrid, 2012. "Entrepreneurship and role models," Journal of Economic Psychology, Elsevier, vol. 33(2), pages 410-424.
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  3. Fritsch, Michael & Brixy, Udo & Falck, Oliver, 2004. "The effect of industry, region and time on new business survival: A multi-dimensional analysis," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-26-04, University of Passau, Faculty of Business and Economics.
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  10. Joachim Wagner, 2006. "Are nascent entrepreneurs 'Jacks-of-all-trades'? A test of Lazear's theory of entrepreneurship with German data," Applied Economics, Taylor & Francis Journals, vol. 38(20), pages 2415-2419.
  11. Ari Hyytinen & Mika Maliranta, 2008. "When Do Employees Leave Their Job for Entrepreneurship?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(1), pages 1-21, 03.
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