KTH/CESIS Working Paper Series in Economics and Institutions of Innovation
Sources of Persistence in Regional Start-Up Rates - evidence from Sweden
() and Sierdjan Koster
Abstract: The relationship between start-up rates and regional
economic development has been studied rather extensively in recent years.
Dynamics in start-up rates have however received considerably less
attention. In this paper we analyze the persistence of start-up rates
across Swedish regions over a decade and analyze the sources of
persistence. We find overall persistence in start-up rates. Start-up rates
of a decade earlier are able to explain over 40 % of the variation in
current start-up rates across regions. The paper introduces and tests two
mechanisms that can account for persistence in start-up rates across
regions: (i) path-dependence in start-up activity, such that there is a
response mechanism between previous and current start-up activity and (ii)
spatially ‘sticky’ and durable determinants of start-ups. A dynamic
panel analysis applying the system GMM estimator of lagged start-up rates
on current start-up rates, confirms that persistence in start-up activity
can be explained by both effects. Using transition probability analysis and
quantile regression techniques, we also show that there is a regional
dimension in persistence.
Keywords: entrepreneurship; start-ups; persistence; path-dependence; start-up dynamics; geography of entrepreneurship; (follow links to similar papers)
JEL-Codes: L26; O18; R11; R12; (follow links to similar papers)
27 pages, April 18, 2009
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Full text versions of the paper:
- This paper is forthcoming as:
Andersson, Martin and Sierdjan Koster, 'Sources of Persistence in Regional Start-Up Rates - evidence from Sweden', Journal of Economic Geography.
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