Papers in Innovation Studies, CIRCLE, Center for Innovation, Research and Competences in the Learning Economy, Lund University
Local Competitiveness fostered through Local Institutions for Entrepreneurship
() and Magnus Henrekson
Abstract: We review and assess the role local institutional
framework conditions play in fostering local entrepreneurship. The basic
premise is that entrepreneurship is a central driver of economic renewal
and change, and that institutions affect both the supply and direction of
entrepreneurship. While local institutions always develop and operate
against the backdrop of national institutional frameworks, in particular in
non-federal states, our review shows that there is plenty of room for local
initiatives and policies to influence the entrepreneurial climate locally.
This pertains to both formal (e.g., taxes, regulations and stringency of
enforcement) and informal (e.g., attitudes and social legitimacy)
institutions. We further argue that the local institutional environment is
essential in any local policy aimed to foster productive (high-impact)
entrepreneurship. Favorable local institutions not only increase the odds
that a region develops or manage to attract entrepreneurial incumbents, but
also the odds that a region reaps the full potential of hosting
entrepreneurial and knowledge-intensive activities.
Keywords: Business climate; Entrepreneurship; Institutions; Job creation; Local policies; Startups; Regulations; Entrepreneurship culture; High-impact entrepreneurs; (follow links to similar papers)
JEL-Codes: D22; H70; L26; M13; O43; R38; (follow links to similar papers)
58 pages, May 7, 2014
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