Does Persistence in Start-up Activity Reflect Persistence in Social Capital?

Michael Fritsch () and Michael Wyrwich

No 2015-009, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: Emerging literature shows that spatial differences in entrepreneurship tend to persist over longer periods of time. A potential mechanism underlying this pronounced persistence is that high levels of start-up activity lead to the emergence of a regional culture and a supporting environment in favor of entrepreneurship that particularly involves social capital. This chapter summarizes the available empirical evidence on the regional persistence of entrepreneurship and elaborates in detail how different elements of such a culture, such as social capital, can exert an influence on the level of new business formation and self-employment. As a demonstration for the relevance of a regional entrepreneurship culture for new business formation, we highlight the case of Germany where we find pronounced persistence of start-up activity despite radical structural and institutional shocks over the course of the 20th century. The German case suggests that there is a long-lasting local culture of entrepreneurship that can survive disruptive changes. We discuss the relationship between place-specific social capital and a regional culture of entrepreneurship and draw policy conclusions.

Keywords: Entrepreneurship; social capital; economic development; self-employment; new business formation; entrepreneurship culture; institutions (search for similar items in EconPapers)
JEL-codes: L26 O11 R11 (search for similar items in EconPapers)
Date: 2015-07-07
New Economics Papers: this item is included in nep-cse, nep-ent, nep-geo, nep-ino, nep-sbm, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Chapter: Does persistence in start-up activity reflect persistence in social capital? (2016)
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