Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 338: Determinants of entrepreneurship. Is it all about the individual or the region?

Mikaela Backman () and Charlie Karlsson ()
Additional contact information
Mikaela Backman: Centre of Excellence for Science and Innovation Studies (CESIS), Jönköping International Business School, & Centre for Entrepreneurship and Spatial Economics (CEnSE), Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Charlie Karlsson: CESIS - Centre of Excellence for Science and Innovation Studies, Jönköping International Business School, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden

Abstract: It is well established at whatever spatial level studied that economic actors exhibit a strong tendency to cluster. Despite this fact many explanations to entrepreneurship only considers the personal characteristics of entrepreneurs. This is certainly not a satisfactory state-of-the-art. It is obvious that the influence of spatial factors must be considered carefully. In this pa¬per we illustrate empirically that variations in the rate of entrepreneurship are explained not only in terms of characteristics of entrepreneurs, such as education, sector of employment, occupation, experience and income but also by the characteristics of i) the localities where they worked before they became entrepreneurs, ii) the localities where they currently started their firm and iii) the regions where these localities are situated. The characteristics of locali¬ties include size, population density, firm density and type of locality (metropolitan, urban, semi-rural or rural). The estimations use a multi-level approach to decipher the how much of the variance that can be explained by the different levels (individual, locality and region). The data used in this study is micro-level data for Sweden provided by Statistics Sweden.

Keywords: entrepreneurship; individual attributes; regional attributes; networks; micro-level; multi-level

JEL-codes: C21; J24; L26; R12

24 pages, December 17, 2013

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