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Clusters of Entrepreneurship

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Listed:
  • Edward L. Glaeser
  • William R. Kerr
  • Giacomo A.M. Ponzetto

Abstract

Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people.

Suggested Citation

  • Edward L. Glaeser & William R. Kerr & Giacomo A.M. Ponzetto, 2009. "Clusters of Entrepreneurship," NBER Working Papers 15377, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15377
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J00 - Labor and Demographic Economics - - General - - - General
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • L0 - Industrial Organization - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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