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Skill composition and regional entrepreneurship: a comparative study between Germany and Portugal

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  • Mendonça, Joana
  • Grimpe, Christoph

Abstract

The question whether agglomeration externalities arise either from specialization or diversification of economic activity has since long been a major topic in the analysis of factors determining economic growth. In this paper we analyze whether a more specialized or a more diverse skill composition of labor in regions affects the level of new firm entries in general as well as in technology- and knowledge-intensive subsectors. We compare Germany and Portugal which exhibit, though EU member states, different institutional infrastructures for entrepreneurship. Based on a harmonized dataset, our results indicate that the skill composition has different effects on firm entry in the two countries. More specifically, for Portugal the specialization of skills has a positive effect on the level on new firm entry in all sectors. In contrast to this, our results for Germany reveal exactly the opposite effect. These results suggest that both specialization and diversity theories hold, and that the effect thus may depend on other more local and regional factors.

Suggested Citation

  • Mendonça, Joana & Grimpe, Christoph, 2009. "Skill composition and regional entrepreneurship: a comparative study between Germany and Portugal," ZEW Discussion Papers 09-060, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:09060
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    Cited by:

    1. Dirk Oberschachtsiek, 2013. "Human Capital Diversity and Entrepreneurship. Results from the regional individual skill dispersion nexus on self-employment activity," Working Paper Series in Economics 289, University of Lüneburg, Institute of Economics.

    More about this item

    Keywords

    Entrepreneurship; skill composition; regional analysis; comparative study;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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