The effect of entrepreneurship on economic development—an empirical analysis using regional entrepreneurship culture

Michael Fritsch () and Michael Wyrwich

Journal of Economic Geography, 2017, vol. 17, issue 1, 157-189

Abstract: We use the historical self-employment rate as an indicator of a regional culture of entrepreneurship and take it as an instrument to analyze the effect of entrepreneurship on economic growth in recent periods. The results indicate that German regions with a high level of entrepreneurship in the mid-1920s have higher start-up rates about 50 years later. Thus, a regional culture of entrepreneurship is an important resource for the persistence of entrepreneurship. Furthermore, we find that there is a significant effect of start-up activity on regional employment growth when using entrepreneurship culture as instrument for start-up activity.

Keywords: Entrepreneurship; 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: 2017
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Citations: View citations in EconPapers (48)

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