Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?
October 2008
Working Paper Number:
CES-08-37
Abstract
Why are some places more entrepreneurial than others? We use Census Bureau data to study local determinants of manufacturing startups across cities and industries. Demo- graphics have limited explanatory power. Overall levels of local customers and suppliers are only modestly important, but new entrants seem particularly drawn to areas with many smaller suppliers, as suggested by Chinitz (1961). Abundant workers in relevant occupations also strongly predict entry. These forces plus city and industry fixed effects explain between sixty and eighty percent of manufacturing entry. We use spatial distributions of natural cost advantages to address partially endogeneity concerns.
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:
econometric,
endogeneity,
manufacturing,
enterprise,
industrial,
company,
employ,
entrepreneurial,
venture,
entrepreneur,
entrepreneurship,
establishment,
metropolitan,
area,
economically,
workforce,
region,
geographically,
industry variation,
urbanization,
city
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:
Metropolitan Statistical Area,
Bureau of Labor Statistics,
National Science Foundation,
Bureau of Economic Analysis,
Census Bureau Longitudinal Business Database,
Longitudinal Business Database,
Chicago Census Research Data Center,
Consolidated Metropolitan Statistical Areas,
Patent and Trademark Office,
Special Sworn Status,
Herfindahl Hirschman Index,
Kauffman Foundation
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