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The Effects of Industrial Structure and Resources upon the Distribution of Fast-growing Small Firms among US Urbanised Areas

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  • Judith J. Friedman

    (JDepartment of Sociology, Rutgers University, New Brunswick, NJ 08903, USA)

Abstract

The organisational structure of a community, especially the local mix of industries and the stock of organisations able to provide resources useful to small firms, affects the community's ability to generate and to sustain small, fast-growing business firms. Several business magazines identify 'top' small public firms annually. This paper uses tobit analysis to compare the number of such firms generated within each of 208 urbanised areas during the 1980s. The number of new 'top' firms in an urbanised area increases with industrial diversity, the extent of growth industries, economic growth, overall economic size and the extent of local venture capital. Urbanised areas with a major university, with a highly-educated population, or with sports organisations also have more 'top' firms. Thus diverse aspects of the community's mix of organisations help to explain the generation and the growth of additional small business organisations.

Suggested Citation

  • Judith J. Friedman, 1995. "The Effects of Industrial Structure and Resources upon the Distribution of Fast-growing Small Firms among US Urbanised Areas," Urban Studies, Urban Studies Journal Limited, vol. 32(6), pages 863-883, June.
    • Handle: RePEc:sae:urbstu:v:32:y:1995:i:6:p:863-883
    DOI: 10.1080/00420989550012690
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    References listed on IDEAS

    as
    1. Dieperink, H. & Nijkamp, P., 1987. "A multiple criteria location model for innovative firms in a communication network," Serie Research Memoranda 0072, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    2. Allen J. Scott, 1982. "Locational Patterns and Dynamics of Industrial Activity in the Modern Metropolis," Urban Studies, Urban Studies Journal Limited, vol. 19(2), pages 111-141, May.
    3. repec:ucp:bkecon:9780226531083 is not listed on IDEAS
    4. Bygrave, William D., 1988. "The structure of the investment networks of venture capital firms," Journal of Business Venturing, Elsevier, vol. 3(2), pages 137-157.
    5. Birley, Sue, 1985. "The role of networks in the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 1(1), pages 107-117.
    6. Florida, Richard & Kenney, Martin, 1988. "Venture capital and high technology entrepreneurship," Journal of Business Venturing, Elsevier, vol. 3(4), pages 301-319.
    7. Amemiya, Takeshi, 1984. "Tobit models: A survey," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 3-61.
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    Cited by:

    1. Schilder, Dirk, 2006. "Public venture capital in Germany: task force or forced task?," Freiberg Working Papers 2006/12, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.

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