Local entrepreneurship clusters in cities
2016 (English)In: Journal of Economic Geography, ISSN 1468-2702, E-ISSN 1468-2710, Vol. 16, no 1, 39-66 p.Article in journal (Refereed) PublishedText
We show that entrepreneurs are co-located within cities. One plausible source of such spatial clustering is local social interactions, where individuals' decisions to become entrepreneurs are influenced by entrepreneurial neighbors. Using geo-coded matched employer-employee data for Sweden, we find that sharing residential neighborhood with established entrepreneurs has a statistically significant and robust influence on the probability that an individual leaves employment for entrepreneurship. An otherwise average neighborhood with a 5% point higher entrepreneurial intensity, all else equal, produces between six and seven additional entrepreneurs per square kilometer, each year. Our estimates suggest a local feedback-effect in which the presence of established entrepreneurs in a neighborhood influences the emergence of new local entrepreneurs. Our analysis supports the conjecture that social interaction effects constitute a mechanism by which local entrepreneurship clusters in cities develop and persist over time.
Place, publisher, year, edition, pages
Oxford University Press, 2016. Vol. 16, no 1, 39-66 p.
entrepreneurship, clusters, peer effects, local social interactions, role models, neighborhood, social network externalities, path dependence
IdentifiersURN: urn:nbn:se:bth-11927DOI: 10.1093/jeg/lbu049ISI: 000374189600002OAI: oai:DiVA.org:bth-11927DiVA: diva2:931733