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Social networks and the geography of entrepreneurship

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  • Olav Sorenson

    (Yale School of Management)

Abstract

Social relationships play at least three important roles in entrepreneurship. They help to determine who sees entrepreneurship as an available and desirable career path. Entrepreneurs use their contacts to raise funds for and to recruit employees and partners to their ventures. Social relationships also influence where and when entrepreneurs want to spend their leisure time. Because of these factors, entrepreneurs tend to found their firms in the places that they live (and in the industries in which they have been employed). That, in turn, implies that industries will tend to become and remain concentrated in a small number of places, even when firms do not benefit from this clustering.

Suggested Citation

  • Olav Sorenson, 2018. "Social networks and the geography of entrepreneurship," Small Business Economics, Springer, vol. 51(3), pages 527-537, October.
    • Handle: RePEc:kap:sbusec:v:51:y:2018:i:3:d:10.1007_s11187-018-0076-7
    DOI: 10.1007/s11187-018-0076-7
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    22. Brixy, Udo & Brunow, Stephan & D'Ambrosio, Anna, 2020. "The unlikely encounter: Is ethnic diversity in start-ups associated with innovation?," Research Policy, Elsevier, vol. 49(4).

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    More about this item

    Keywords

    Agglomeration; Clusters; Economic geography; Entrepreneurship; Social networks;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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