IDEAS home Printed from https://ideas.repec.org/p/cen/wpaper/03-02.html
   My bibliography  Save this paper

Endogenous Growth and Entrepreneurial Activity in Cities

Author

Listed:
  • Zoltan J Acs
  • Catherine Armington

Abstract

Recent theories of economic growth have stressed the role of externalities in generating growth. Using data from the Census Bureau that tracks all employers in the whole U.S. private sector economy, we examine the impact of these externalities, as measured by entrepreneurial activity, on employment growth in Local Market Areas. We find that differences in levels of entrepreneurial activity, diversity among geographically proximate industries, and the extent of human capital are positively associated with variation in growth rates, but the manufacturing sector appears to be an exception.

Suggested Citation

  • Zoltan J Acs & Catherine Armington, 2003. "Endogenous Growth and Entrepreneurial Activity in Cities," Working Papers 03-02, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:03-02
    as

    Download full text from publisher

    File URL: https://www2.census.gov/ces/wp/2003/CES-WP-03-02.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    3. Glaeser, Edward L. & Scheinkman, JoseA. & Shleifer, Andrei, 1995. "Economic growth in a cross-section of cities," Journal of Monetary Economics, Elsevier, vol. 36(1), pages 117-143, August.
    4. Edward P. Lazear, 2005. "Entrepreneurship," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 649-680, October.
    5. Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, vol. 43(2), pages 409-429, February.
    6. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    7. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    8. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
    9. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    10. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November.
    11. Boyan Jovanovic & Rafael Rob, 1989. "The Growth and Diffusion of Knowledge," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(4), pages 569-582.
    12. Acs,Zoltan J. & Carlsson,Bo & Karlsson,Charlie (ed.), 1999. "Entrepreneurship, Small and Medium-Sized Enterprises and the Macroeconomy," Cambridge Books, Cambridge University Press, number 9780521621052, November.
    13. repec:hoo:wpaper:e-95-4 is not listed on IDEAS
    14. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
    15. Bresnahan, Timothy F & Gambardella, Alfonso & Saxenian, AnnaLee, 2001. "'Old Economy' Inputs for 'New Economy' Outcomes: Cluster Formation in the New Silicon Valleys," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 10(4), pages 835-860, December.
    16. Carree, Martin & Klomp, Luuk, 1996. "Small Business and Job Creation: A Comment," Small Business Economics, Springer, vol. 8(4), pages 317-322, August.
    17. Zoltan J Acs & Catherine Armington, 1998. "Longitudinal Establishment And Enterprise Microdata (LEEM) Documentation," Working Papers 98-9, Center for Economic Studies, U.S. Census Bureau.
    18. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," Higher School of Economics Economic Journal Экономический журнал Высшей школы экономики, CyberLeninka;Федеральное государственное автономное образовательное учреждение высшего образования «Национальный исследовательский университет «Высшая школа экономики», vol. 5(1), pages 3-34.
    19. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    20. Catherine Armington & Zoltan J. Acs, 2008. "The Determinants of Regional Variation in New Firm Formation," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 18, pages 224-243, Edward Elgar Publishing.
    21. Ian Smith & Zoltan J. Acs & Felix R. FitzRoy, 2002. "High-technology employment and R&D in cities: Heterogeneity vs specialization," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 36(3), pages 373-386.
    22. Kirchhoff, Bruce A & Greene, Patricia G, 1998. "Understanding the Theoretical and Empirical Content of Critiques of U.S. Job Creation Research," Small Business Economics, Springer, vol. 10(2), pages 153-169, March.
    23. Wennekers, Sander & Thurik, Roy, 1999. "Linking Entrepreneurship and Economic Growth," Small Business Economics, Springer, vol. 13(1), pages 27-55, August.
    24. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sierdjan Koster, 2007. "The Entrepreneurial And Replication Function Of New Firm Formation," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 98(5), pages 667-674, December.
    2. Marshall, Maria I. & Samal, Ananya, 2006. "The Effect Of Human And Financial Capital On The Entrepreneurial Process: An Urban-Rural Comparison Of Entrepreneurs In Indiana," Staff Papers 28651, Purdue University, Department of Agricultural Economics.
    3. Azam Chaudhry & Maryiam Haroon, 2015. "The Economic Impact of New Firms in Punjab," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(Special E), pages 143-182, September.
    4. Cassar, Gavin, 2006. "Entrepreneur opportunity costs and intended venture growth," Journal of Business Venturing, Elsevier, vol. 21(5), pages 610-632, September.
    5. Sarah A. Low & Stephan Weiler, 2012. "Employment Risk, Returns, and Entrepreneurship," Economic Development Quarterly, , vol. 26(3), pages 238-251, August.
    6. Carolina Pasciaroni, 2013. "Ciudades de tamano medio e innovación: Una aproximación sistémica," Revista Economía y Región, Universidad Tecnológica de Bolívar, vol. 7(1), pages 101-124, June.
    7. Floater, Graham & Rode, Philipp & Zenghelis, Dimitri, 2014. "Copenhagen: green economy leader report," LSE Research Online Documents on Economics 60781, London School of Economics and Political Science, LSE Library.
    8. Ron Botham & Andrew Graves, 2011. "Regional variations in new firm job creation: The contribution of high growth start-ups," Local Economy, London South Bank University, vol. 26(2), pages 95-107, March.
    9. Carolina Pasciaroni, 2013. "Ciudades de tamano medio e innovacion: Una aproximacion sistemica," Documentos de Trabajo 11078, Universidad Tecnológica de Bolívar.
    10. Andrés Camacho Murillo & Hector Ríos Hernández, 2011. "Competencia intra-industria, aglomeraciones regionales y crecimiento económico: caso industria de alimentos," Revista Facultad de Ciencias Económicas, Universidad Militar Nueva Granada, June.
    11. Zoltan J. Acs & Catherine Armington, 2008. "The Impact of Geographic Differences in Human Capital on Service Firm Formation Rates," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 19, pages 244-278, Edward Elgar Publishing.
    12. Rodica Crudu, 2019. "The Role of Innovative Entrepreneurship in the Economic Development of EU Member Countries," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 15(1), pages 35-60.
    13. Andre van Stel & Martin Carree & Roy Thurik, 2004. "The effect of entrepreneurship on national economic growth: an analysis using the GEM database," Papers on Entrepreneurship, Growth and Public Policy 2004-34, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    14. Andre van Stel & Bart Diephuis, 2004. "Business dynamics and employment growth: a cross-country analysis," Papers on Entrepreneurship, Growth and Public Policy 2004-32, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    15. Fehmi Tanrısever & S. Sinan Erzurumlu & Nitin Joglekar, 2012. "Production, Process Investment, and the Survival of Debt‐Financed Startup Firms," Production and Operations Management, Production and Operations Management Society, vol. 21(4), pages 637-652, July.
    16. Marcelin Joanis & Fernand Martin & Suzie St-Cerny, 2004. "Quel avenir pour les politiques de développement régional au Québec ? (Version mise à jour le 9 août 2004)," CIRANO Project Reports 2004rp-05, CIRANO.
    17. Michael Fritsch & Pamela Mueller, 2004. "Regional Growth Regimes Revisited - The Case of West Germany," Papers on Entrepreneurship, Growth and Public Policy 2004-04, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    18. Gebremeskel Gebremariam & Tesfa Gebremedhin & Peter Schaeffer, 2010. "Analysis of county employment and income growth in Appalachia: a spatial simultaneous-equations approach," Empirical Economics, Springer, vol. 38(1), pages 23-45, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zoltan J. Acs & Catherine Armington, 2008. "Employment Growth and Entrepreneurial Activity in Cities," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 25, pages 353-369, Edward Elgar Publishing.
    2. Zoltan J Acs & Catherine Armington, 2003. "The Geographic Concentration of New Firm Formation and Human Capital: Evidence from the Cities," Working Papers 03-05, Center for Economic Studies, U.S. Census Bureau.
    3. Zoltan J. Acs & Catherine Armington, 2008. "The Impact of Geographic Differences in Human Capital on Service Firm Formation Rates," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 19, pages 244-278, Edward Elgar Publishing.
    4. Zoltan J. Acs & Catherine Armington, 2004. "New Firm Survival and Human Capital," Papers on Entrepreneurship, Growth and Public Policy 2004-14, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    5. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853, Elsevier.
    6. Aurélie LALANNE & Guillaume POUYANNE, 2012. "Ten years of metropolization in economics: a bibliometric approach (In French)," Cahiers du GREThA (2007-2019) 2012-11, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    7. Zoltán J. Ács & Pontus Braunerhjelm & David B. Audretsch & Bo Carlsson, 2015. "The knowledge spillover theory of entrepreneurship," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 7, pages 129-144, Edward Elgar Publishing.
    8. David B. Audretsch & Max Keilbach, 2006. "Entrepreneurship, Growth and Restructuring," Papers on Entrepreneurship, Growth and Public Policy 2006-13, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    9. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    10. Canever, Mario Duarte & Carraro, Andre & Kohls, Volnei Krause & Teles, Morgan Yuri Oliveira, 2010. "Entrepreneurship in the Rio Grande do Sul, Brazil: the determinants and consequences for the municipal development," Brazilian Journal of Rural Economy and Sociology (Revista de Economia e Sociologia Rural-RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 48(1), pages 1-24, March.
    11. Iritié, B. G. Jean-Jacques, 2014. "Enjeux des politiques industrielles basées sur les clusters d'innovation: cas des pôles de compétitivité [Issues of Innovative Clusters-based Industrial Policy: Case of Pole of Competitiveness]," MPRA Paper 54429, University Library of Munich, Germany.
    12. Mark Roberts & Mark Setterfield, 2010. "Endogenous Regional Growth: A Critical Survey," Chapters, in: Mark Setterfield (ed.), Handbook of Alternative Theories of Economic Growth, chapter 21, Edward Elgar Publishing.
    13. David Audretsch & Roy Thurik, 2004. "A Model of the Entrepreneurial Economy," Papers on Entrepreneurship, Growth and Public Policy 2004-12, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    14. Berliant, Marcus & Reed III, Robert R. & Wang, Ping, 2006. "Knowledge exchange, matching, and agglomeration," Journal of Urban Economics, Elsevier, vol. 60(1), pages 69-95, July.
    15. Matthias Firgo & Peter Mayerhofer, 2015. "Wissensintensive Unternehmensdienste, Wissens-Spillovers und regionales Wachstum. Teilprojekt 1: Wissens-Spillovers und regionale Entwicklung – Welche strukturpolitische Ausrichtung optimiert das Wach," WIFO Studies, WIFO, number 58342, January.
    16. Gebremeskel Gebremariam & Tesfa Gebremedhin & Peter Schaeffer & Tim Phipps & Randall Jackson, 2007. "A Spatial Panel Simultaneous-Equations Model of Business Growth, Migration Behavior, Local Public Services and Household Income in Appalachia," Working Papers Working Paper 2007-11, Regional Research Institute, West Virginia University.
    17. Marcus Berliant & Ping Wang, 2005. "Dynamic Urban Models: Agglomeration and Growth," Contributions to Economic Analysis, in: Urban Dynamics and Growth: Advances in Urban Economics, pages 533-581, Emerald Group Publishing Limited.
    18. Niccolò Ghio & Massimiliano Guerini & Erik Lehmann & Cristina Rossi-Lamastra, 2015. "The emergence of the knowledge spillover theory of entrepreneurship," Small Business Economics, Springer, vol. 44(1), pages 1-18, January.
    19. Thomas Ejdemo & Daniel Örtqvist, 2021. "Exploring a leading and lagging regions dichotomy: does entrepreneurship and diversity explain it?," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-26, December.
    20. Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 983-1028, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cen:wpaper:03-02. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dawn Anderson (email available below). General contact details of provider: https://edirc.repec.org/data/cesgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.