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  • 1.
    Andersson, Martin
    et al.
    Blekinge Institute of Technology, Faculty of Engineering, Department of Industrial Economics.
    Larsson, Johan P.
    Lund Univ, CIRCLE, Box 118, S-22100 Lund, Sweden.;JIBS, Dept Econ Finance & Stat, Ctr Entrepreneurship & Spatial Econ CEnSE, Jonkoping, Sweden.;Swedish Entrepreneurship Forum, Stockholm, Sweden..
    Local entrepreneurship clusters in cities2016In: Journal of Economic Geography, ISSN 1468-2702, E-ISSN 1468-2710, Vol. 16, no 1, p. 39-66Article in journal (Refereed)
    Abstract [en]

    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.

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