Knowledge-based service economy and firm entry: an alternative to the knowledge spillover theory of entrepreneurship

Alexandra Tsvetkova and Mark Partridge

Small Business Economics, 2021, vol. 56, issue 2, No 7, 637-657

Abstract: Abstract Recent research on the determinants of high-tech business entry increasingly relies on the knowledge spillover theory of entrepreneurship (KTSE), which contends that employees-turned-entrepreneurs start new companies in order to commercialize unused local knowledge generated by incumbent firms and universities. Existing literature in the USA context finds a positive relationship between regional knowledge production and (total) high-tech start-up rates, which is interpreted as lending empirical support to the theory. In this paper, we perform a systematic test of the KSTE and show that KSTE-based explanation of business entry is not always consistent with the US firm formation patterns when the analysis gradually shifts from less to more knowledge-intensive environments. We then discuss alternative business entry mechanisms that are more in line with the geographical and sectoral variation in the US high-tech start-up rates.

Keywords: Business entry; Innovation; Knowledge-spillover theory of entrepreneurship; O3; R11; D80; L26 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:56:y:2021:i:2:d:10.1007_s11187-019-00193-2

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DOI: 10.1007/s11187-019-00193-2

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