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An Analysis of the Relationship Between New Firm Formation and Economic Development in the Northeast Region of the United States

Author

Listed:
  • Saima Bashir

    (Department of Resource Management, West Virginia University)

  • Tesfa Gebremedhin

    (Department of Resource Management, West Virginia University)

Abstract

The overall objective of this study is to provide policy makers with information on the role of new firm formation in the economic development in the Northeast region of the United States. This study identifies and estimates the impacts of new firm formation in the economic development of the Northeast region. The empirical model of this study is derived from the three-equation simultaneous model of Deller et al. (2001). In this study, Three Stage Least Squares (3SLS) method is used to estimate the simultaneous equations model. The research findings indicate that population density and per capita income have a positive link with new firm formation. Higher population density and per capita income encourage entrepreneurs to start new firms in the region. This leads to an increase of new jobs, which is a positive contribution to economic development in the Northeast region.

Suggested Citation

  • Saima Bashir & Tesfa Gebremedhin, 2011. "An Analysis of the Relationship Between New Firm Formation and Economic Development in the Northeast Region of the United States," Working Papers Working Paper 2011-02, Regional Research Institute, West Virginia University.
    • Handle: RePEc:rri:wpaper:2011wp02
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    File URL: https://researchrepository.wvu.edu/rri_pubs/57/
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    References listed on IDEAS

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    2. Thomas Neumann, 2021. "The impact of entrepreneurship on economic, social and environmental welfare and its determinants: a systematic review," Management Review Quarterly, Springer, vol. 71(3), pages 553-584, July.

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    More about this item

    Keywords

    New Firm Formation; economic development; northeast region; simultaneous analysis;
    All these keywords.

    JEL classification:

    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy

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