Karin Hellerstedt (), Karl Wennberg () and Lars Frederiksen ()
Karin Hellerstedt: Jönköping International Business School, Postal: Jönköping International Business School, PO Box 1026, SE-551 11 Jönköping, Sweden
Karl Wennberg: The Ratio Institute and Stockholm School of Economics., Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden, , and, , Stockholm School of Economics, P.O. Box 6501, SE-11383 Stockholm, Sweden
Lars Frederiksen: Innovation Management Group, Department of Business Administration, Aarhus University,, Postal: Innovation Management Group, Department of Business Administration, Aarhus University, Bathlolins Allé 10, 8000 Aarhus C, Denmark.
Abstract: This paper investigates regional start-up rates in the knowledge intensive services and high-tech industries. Integrating insights from economic geography and population ecology into the literature on entrepreneurship, we develop a theoretical framework which captures how both supply- and demand-side factors mold the regional bedrock for start-ups in knowledge intensive industries. Using multi-level data of all knowledge intensive start-ups across 286 Swedish municipalities between 1994 and 2002 we demonstrate how characteristics of the economic and political milieu within each region influence the ratio of firm births. We find that economically affluent regions dominate entrepreneurial activity in terms of firm births, yet a number of much smaller rural regions also revealed high levels of start-ups. Knowledge spillovers from universities and firm R&D strongly affect the start-up rates for both knowledge intensive manufacturing and knowledge intensive services firms. However, the start-up rate of knowledge-intensive service firms is tied more strongly to the supply of highly educated individuals and the political regulatory regime within the municipality. This suggests that knowledge intensive service-start-ups are more susceptible to both demand-side and supply-side context than manufacturing start-ups. Our study contributes to the growing stream of research that explains entrepreneurial activity as shaped by contextual factors, most notably educational institutions that contribute to technology startups.
40 pages, April 24, 2014
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