Clusters of Entrepreneurship
October 2009
Working Paper Number:
CES-09-36
Abstract
Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people.
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:
industrial,
sale,
growth,
employ,
entrepreneurial,
entrepreneur,
entrepreneurship,
sector,
midwest,
regional,
employment growth,
establishment,
cluster,
growth firms,
wholesale,
startup firms,
city,
regional industry
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identified to contain references to specific institutions, datasets, and other organizations.
:
National Science Foundation,
Ordinary Least Squares,
Longitudinal Business Database,
1940 Census,
Kauffman Foundation
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