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Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?

Edward L. Glaeser () and William Kerr ()
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Edward L. Glaeser: Harvard University, John F. Kennedy School of Government; Faculty of Arts and Sciences

No 09-055, Harvard Business School Working Papers from Harvard Business School

Abstract: Why are some places more entrepreneurial than others? We use Census Bureau data to study local determinants of manufacturing startups across cities and industries. Demographics have limited explanatory power. Overall levels of local customers and suppliers are only modestly important, but new entrants seem particularly drawn to areas with many smaller suppliers, as suggested by Chinitz (1961). Abundant workers in relevant occupations also strongly predict entry. These forces plus city and industry fixed effects explain between sixty and eighty percent of manufacturing entry. We use spatial distributions of natural cost advantages to address partially endogeneity concerns.

Keywords: Entrepreneurship; Industrial Organization; Agglomeration; Labor Markets; Input-Output Flows; Innovation; Research and Development; Patents. (search for similar items in EconPapers)
JEL-codes: J2 L0 L1 L2 L6 O3 R2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-ent, nep-geo and nep-ure
Date: 2008-10
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Related works:
Journal Article: Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain? (2009) Downloads
Working Paper: Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain? (2008) Downloads
Working Paper: Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain? (2008) Downloads
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