A Spatial Analysis of Entrepreneurship and Institutional Quality: Evidence from U.S. Metropolitan Areas

Jamie Bologna

Journal of Regional Analysis and Policy, 2014, vol. 44, issue 2

Abstract: This paper uses the Stansel (2013) economic freedom index for a maximum of 375 U.S. metropolitan areas to estimate the effect of economic freedom on entrepreneurship while con-trolling for spatial dependence. This paper finds statistically significant evidence that increas-es in economic freedom in one area result in increases in entrepreneurial activity in neighbor-ing areas. Furthermore, the total (direct plus indirect) effects of an increase in economic free-dom on entrepreneurship are positive and statistically significant, indicating that a positive-sum game is present. However, these effects are small in magnitude. In order to explain a cumulative one standard deviation increase in either one of the entrepreneurial measures pre-sented in this paper, there would have to be an increase in the freedom index equivalent to moving from the least-free area to the most-free area.

Keywords: Community/Rural/Urban Development; Public Economics (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:jrapmc:243968

DOI: 10.22004/ag.econ.243968

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