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Spatial heterogeneity, industry heterogeneity, and entrepreneurship

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  • Hien Thu Tran

    (Edge Hill University)

  • Enrico Santarelli

    (University of Bologna)

Abstract

The prevalence of entrepreneurship varies not only across regions but also among industries. Using a unique panel dataset of 60 two-digit industries across 64 provinces from 2000 to 2010 in Vietnam, we investigate the importance of spatial and sectoral heterogeneity in an analysis of the determinants of entrepreneurship and empirically explore the interaction effect of geographic conditions and industry dynamism. Overall, our results confirm the significance of industry structural variables and their joint effect with geographic conditions in fostering new firm formation. Particularly, (i) growth-driven entries are generally higher in provinces that offer higher salaries; (ii) technology-intensive industries within regions that have strong knowledge spillover effects are appealing to new entries. Others noteworthy findings include: (i) ‘necessity entrepreneurship’ is prevalent in Vietnam, but limited to extractive and service industries that are typically labor intensive; (ii) firms tend to concentrate more in agglomerated locations. This effect, however, evaporates for high-tech industries; and (iii) industry profitability and niche dynamism all play a crucial role in stimulating new start-ups. We apply the system generalized method of moments to obtain empirical evidence in the study.

Suggested Citation

  • Hien Thu Tran & Enrico Santarelli, 2017. "Spatial heterogeneity, industry heterogeneity, and entrepreneurship," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(1), pages 69-100, July.
    • Handle: RePEc:spr:anresc:v:59:y:2017:i:1:d:10.1007_s00168-017-0819-4
    DOI: 10.1007/s00168-017-0819-4
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    Cited by:

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    4. Tran, Hien Thu, 2019. "Institutional quality and market selection in the transition to market economy," Journal of Business Venturing, Elsevier, vol. 34(5), pages 1-1.
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    8. Enrico Santarelli & Hien Thu Tran, 2018. "The interaction of institutional quality and human capital in shaping the dynamics of capital structure in Vietnam," WIDER Working Paper Series 66, World Institute for Development Economic Research (UNU-WIDER).
    9. Yuanbin Xu & Yuchen Wang & Fucai Lu & Quan Xiao, 2023. "Toss a Peach and Get Back a Plum: Impact of Customized Services on Firm Performance," SAGE Open, , vol. 13(3), pages 21582440231, September.
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    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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