The spatial distribution of self-employment — evidence from Jharkhand

Although several studies have proposed that entrepreneurial processes and growth can be facilitated or constrained by their operational context, an evaluation of the entrepreneurial success not just limited to the social, institutional, or economic contexts but also the spatial context is much required. As studies in the developing regions were scarce, this article aims to explore the spatial evidences of entrepreneurship by adopting distance from the capital city as a discriminating factor. The context of the study is the state of Jharkhand in India, rich in natural resources, but with unregulated labor markets and unequal concentration of economic activities. Discriminant analysis was adopted to find the percentage of new start-up registrations based on the distance from the main headquarters in the state in each of the 24 districts of the state. The resulting discriminant analysis revealed that literacy rate, quality of local physical infrastructure, population density and household banking and credit conditions were critical to the spatial distribution of self-employment opportunities. The study is a first in the region to examine and explicitly explore the variables causing entrepreneurial spread in the region and could be a departure point for future research in the area of spatial entrepreneurship.