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Entrepreneurial dynamics over space and time

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  • Fossen, Frank M.
  • Martin, Thorsten

Abstract

Entrepreneurship is a regional and persistent phenomenon. We jointly investigate spatial dependence and serial dynamics of new business formation. Using panel data from all 402 German counties for 1996–2011, we estimate dynamic spatial panel data models of start-up activity in the high-tech and manufacturing industries. We consider regions of different sizes and systematically search for the most suitable spatial weights matrices. We find substantial spatial dependence as well as time persistence of start-up activity, especially in the high-tech industry. This suggests that local start-up activity has positive external effects and that entrepreneurship policy could play an efficiency-enhancing role.

Suggested Citation

  • Fossen, Frank M. & Martin, Thorsten, 2018. "Entrepreneurial dynamics over space and time," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 204-214.
    • Handle: RePEc:eee:regeco:v:70:y:2018:i:c:p:204-214
    DOI: 10.1016/j.regsciurbeco.2018.04.004
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    2. Vanessa Hellwig, 2023. "Digital gravity? Firm birth and relocation patterns of young digital firms in Germany," Journal of Regional Science, Wiley Blackwell, vol. 63(2), pages 340-378, March.
    3. Haoying Li & Jonas Østergaard Nielsen & Rui Chen, 2023. "Rural Entrepreneurship Development in Southwest China: A Spatiotemporal Analysis," Land, MDPI, vol. 12(4), pages 1-22, March.
    4. Congregado, Emilio & Fossen, Frank M. & Rubino, Nicola & Troncoso, David, 2024. "Long-Term Effects of Shocks on New Opportunity and Necessity Entrepreneurship," IZA Discussion Papers 16930, Institute of Labor Economics (IZA).
    5. Fossen, Frank M. & McLemore, Trevor & Sorgner, Alina, 2024. "Artificial Intelligence and Entrepreneurship," IZA Discussion Papers 17055, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Entrepreneurship; New business formation; Spatial dependence; Path dependency; Persistence; Spatial panel;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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