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When the difference makes a difference – the regional embeddedness of entrepreneurship

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  • Robert J. Breitenecker
  • Rainer Harms
  • Antje Weyh
  • Daniela Maresch
  • Sascha Kraus

Abstract

Regional determinants of new firm formation are of interest to researchers and policymakers. In the analysis of new firm formation, most studies use econometric approaches that mask intra-unit variations, not recognizing counterbalancing and dilution effects as a result. Recent advances in spatial statistics such as Geographically Weighted Regression (GWR) take local variations into account. However, these approaches operate only on a bivariate level, making it impossible to detect the homogenous parts of the area under examination with regard to a number of relationships between new firm formation and its determinants. Based on a sample of 412 German regions, we apply GWR and subsequent graph-partitioning clustering to identify multi-relationally homogeneous sub-areas. Being that the results suggest a four-cluster solution, ‘one size fits all’ policies and premature unit zoning can be called into question.

Suggested Citation

  • Robert J. Breitenecker & Rainer Harms & Antje Weyh & Daniela Maresch & Sascha Kraus, 2017. "When the difference makes a difference – the regional embeddedness of entrepreneurship," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 29(1-2), pages 71-93, January.
    • Handle: RePEc:taf:entreg:v:29:y:2017:i:1-2:p:71-93
    DOI: 10.1080/08985626.2016.1255432
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    1. Wagner, Joachim, 2004. "Are Young and Small Firms Hothouses for Nascent Entrepreneurs? Evidence from German Micro Data," IZA Discussion Papers 989, Institute of Labor Economics (IZA).
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    Cited by:

    1. Miguel Manjon & Zineb Aouni & Nathalie Crutzen, 2022. "Green and digital entrepreneurship in smart cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(2), pages 429-462, April.
    2. Xu, Bing & Chen, Xiaohui & Wang, Yanyan, 2020. "A new dynamic classification of enterprises for implementing precise industrial policies," Journal of Business Research, Elsevier, vol. 118(C), pages 463-473.

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