Effects of Regional Human Capital Structure on Business Entry: A Comparison of Independent Startups and New Subsidiaries in Different Industries

Kenta Ikeuchi and Hiroyuki Okamuro

Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: This paper aims to investigate the regional determinants of entry with special attention to the effects of regional human capital, using prefecture-level data from Japan. On the basis of some recent studies in the field, we investigate the effects of several regional factors on business entry, distinguishing between independent startups and new subsidiaries of existing firms on the one hand, and comparing different sectors on the other. Using pooled regional data at the prefecture level for our periods between 1996 and 2006, we estimate the impact of various regional factors, including human capital structure, on the number of independent startups and new subsidiaries for each industry sector, simultaneously. Estimation results demonstrate considerable differences between independent startups and subsidiaries as well as among different industry sectors with regard to the impact of regional human capital structure on business entry. First, the entry of independent startups in the manufacturing sector is positively related with regional human capital. Second, in contrast to our hypothesis, we found a positive relationship between regional human capital structure and the entry of new subsidiaries in the service sector. Third, the regional human capital structure is more important for regional entrepreneurship in more technology-intensive (high-tech) service industries. Considering the possible implications, we suggest that the regional policy to activate business startups should focus more on the differences between encouraging local entrepreneurship and attracting new subsidiaries, and recognize that these differences may vary even within the service sector, depending on what type of human capital is required.

Keywords: entry; region; independent startup; subsidiary; entrepreneurial human capital (search for similar items in EconPapers)
JEL-codes: L26 M13 R32 (search for similar items in EconPapers)
Date: 2010-02
New Economics Papers: this item is included in nep-ent, nep-geo, nep-hrm, nep-sbm and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd09-113.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hst:ghsdps:gd09-113

Access Statistics for this paper

More papers in Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University Contact information at EDIRC.
Bibliographic data for series maintained by Tatsuji Makino ().