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Occupational Choice and Social Contacts Across Regions

Author

Listed:
  • Stefan Bauernschuster

    (University of Jena)

  • Oliver Falck

    (Ifo Institute for Economic Research)

  • Stephan Heblich

    (Max Planck Institute of Economics, Jena)

Abstract

This paper tests the importance of social contacts on entrepreneurship. To measure differences in the interconnectedness of social contacts, we compare rural and agglomerated areas. A smaller community size in rural areas generates greater network closure. Agents' neighborhoods are more likely to overlap, which intensifies social contacts and thus facilitates resource mobilization. Analyzing the impact of social contacts across regions, we find that greater network closure increases the likelihood of being an entrepreneur by 1.9 to 14.2 percentage points, depending on the number of underlying social contacts. These results remain robust after applying matching techniques and concentrating on young entrepreneurs.

Suggested Citation

  • Stefan Bauernschuster & Oliver Falck & Stephan Heblich, 2008. "Occupational Choice and Social Contacts Across Regions," Jena Economics Research Papers 2008-079, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2008-079
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    File URL: https://oweb.b67.uni-jena.de/Papers/jerp2008/wp_2008_079.pdf
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    Citations

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    Cited by:

    1. Oliver Falck & Stephan Heblich & Elke Lüdemann, 2009. "Identity and Entrepreneurship," CESifo Working Paper Series 2661, CESifo.
    2. Oliver Falck & Stephan Heblich & Elke Luedemann, 2012. "Identity and entrepreneurship: do school peers shape entrepreneurial intentions?," Small Business Economics, Springer, vol. 39(1), pages 39-59, July.
    3. David Audretsch & Oliver Falck & Stephan Heblich, 2011. "Who’s got the aces up his sleeve? Functional specialization of cities and entrepreneurship," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 621-636, June.

    More about this item

    Keywords

    Occupational Choice; Entrepreneurship; Social Contacts;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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