Entrepreneurship Capital and Regional Productivity Revisited

José Massón-Guerra () and Pedro Ortín-Angel
Authors registered in the RePEc Author Service: Pedro Ortín Ángel

MPRA Paper from University Library of Munich, Germany

Abstract: Entrepreneurship capital has been considered in the literature to be a public good, so it will positively affect a region’s total factor productivity. There is evidence confirming a positive relationship between entrepreneurship capital measures and regional production. This paper argues that the number of firms in a region will be positively related with the regional production in the presence of decreasing returns to scale in firms’ production technology. So if we do not control for the number of firms (and entrepreneurship capital is positively related with the stock of firms) we may be mixing both effects, returns to scale and public goods. This paper provides a methodological benchmark for distinguishing between both effects. The analysis conducted using a sample of 52 Spanish provinces for eleven years suggests major differences and conclusions between methodologies. In our data, previous methods overestimate the effect of regional entrepreneurship capital on the economy.

Keywords: Entrepreneurship Capital; Regional Productivity; Scale Economies (search for similar items in EconPapers)
JEL-codes: L26 O4 R11 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ent, nep-pbe, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/57470/1/MPRA_paper_57470.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/57538/1/MPRA_paper_57538.pdf revised version (application/pdf)

Related works:
Working Paper: Entrepreneurship Capital and Regional Productivity Revisited (2016)
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:pra:mprapa:57470

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().