KTH/CESIS Working Paper Series in Economics and Institutions of Innovation
The location of new firms - Influence of commuting behaviour
() and Charlie Karlsson
Abstract: In this paper, we analyse where people who become
self-employed actually start their firms. In the entrepreneurship
literature, it is generally assumed that individuals who start a firm start
it where they live. We question this general assumption and show that this
does not hold for commuters. Our results show that of those individuals
that were short-distance commuters in 2007 and become self-employed in
2008, 90.1 percent started their firm in their work munici-pality. Only 9.4
percent started their firm in their residence municipality. For
long-distance commuters, the figures were 93.6 and 6.4 percent,
respectively. Our econometric estimations show that the probability to
start a firm in the work municipality increases with the number of years as
a commuter, with commuting to a larger municipality, and with the relative
size of the work municipality compared to the municipality of residence.
Our results indicate that the entrepreneurship literature must reconsider
its general statement that individuals start firms where they live.
Keywords: Entrepreneurship; self-employment; location; commuting; networks; micro-level data; (follow links to similar papers)
JEL-Codes: C21; J24; L26; R12; (follow links to similar papers)
20 pages, May 7, 2015
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