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The Location of Business Support Programs: Does the Knowledge Context Matter?

  • Kingsley E. Haynes

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    Business support programs, represented by business incubators (BIs) and small business development centers (SBDCs), play an important role in assisting new or small firms, nurturing entrepreneurial culture, and fostering regional economic growth. For that reason, the location of these programs may interest regional planners or economic practitioners who have the incentive to create or attract these programs. Our previous studies have found that the presence of both types of business support programs is positively associated with the level of agglomeration and negatively associated with the level of business development. It is however unclear whether the local knowledge context may influence the local presence of BIs or SBDCs. This paper examines the role of knowledge in shaping the geography of BIs and SBDCs in the US using county-level data. Human capital, the university, and high technology are used as the proxies for knowledge. Their effects on the presence of BIs and SBDCs are investigated in binomial logistic regressions. We also control other county-specific characteristics by including three common factors derived via factor analysis from 27 demographic, social, and economic variables. This study highlights business support programs as the link between regional innovation systems and small or new firms.

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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper1499.pdf
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    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p1499.

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    Date of creation: Sep 2011
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    Handle: RePEc:wiw:wiwrsa:ersa10p1499
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    1. Sam Youl Lee & Richard Florida & Zoltan Acs, 2004. "Creativity and Entrepreneurship: A Regional Analysis of New Firm Formation," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 879-891.
    2. Timothy J. Bartik, 2002. "Small Business Start-Ups in the United States: Estimates of the Effects of Characteristics of States," Book chapters authored by Upjohn Institute researchers, in: Norris F. Krueger (ed.), Entrepreneurship: Critical Perspectives on Business and Management, volume 0, pages 191-210 W.E. Upjohn Institute for Employment Research.
    3. Carlsson, B & Stankiewicz, R, 1991. "On the Nature, Function and Composition of Technological Systems," Journal of Evolutionary Economics, Springer, vol. 1(2), pages 93-118, April.
    4. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, June.
    5. Zoltan Acs & David Audretsch & Erik Lehmann, 2013. "The knowledge spillover theory of entrepreneurship," Small Business Economics, Springer, vol. 41(4), pages 757-774, December.
    6. David Audretsch & Dirk Dohse & Annekatrin Niebuhr, 2010. "Cultural diversity and entrepreneurship: a regional analysis for Germany," The Annals of Regional Science, Springer, vol. 45(1), pages 55-85, August.
    7. Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-90, September.
    8. Lerner, Josh, 1999. "The Government as Venture Capitalist: The Long-Run Impact of the SBIR Program," The Journal of Business, University of Chicago Press, vol. 72(3), pages 285-318, July.
    9. Acs, Zoltan J & Audretsch, David B, 1987. "Innovation, Market Structure, and Firm Size," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 567-74, November.
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