The Local Origins of Business Formation: Entry as a Two-Stage Process

Emin Dinlersoz, Timothy Dunne, John Haltiwanger and Veronika Penciakova

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: The business entry literature typically observes firms only at the first hire. We provide a new perspective using linked administrative microdata tracking the universe of U.S. business applications and their transition into employer firms. We model entry as a two-stage process: pursuit of a business idea (proxied by a business application) and implementation (transition). Results show these margins are distinct and associate differently with local conditions. While both margins matter, high-startup locations are characterized by high application intensity, whereas low-startup locations exhibit low transition rates, suggesting geographic disparities in entry arise from different dynamics at each stage of the entrepreneurial process.

Pages: 63 pages
Date: 2023-07
New Economics Papers: this item is included in nep-ent, nep-geo and nep-ure
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Citations: View citations in EconPapers (4)

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https://www2.census.gov/library/working-papers/2023/adrm/ces/CES-WP-23-34R.pdf Revised version, 2025 (application/pdf)
https://www2.census.gov/library/working-papers/2023/adrm/ces/CES-WP-23-34.pdf First version, 2023 (application/pdf)

Related works:
Working Paper: The Local Origins of Business Formation: Entry as a Two-Stage Process (2026)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:23-34

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