Entrepreneurship Capital and Regional Productivity Revisited

José Massón-Guerra () and Pedro Ortín-Ángel
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 the total factor productivity of the firms in a certain region. There is evidence confirming a positive relationship between entrepreneurship capital measures and regional production. This paper argues that this evidence could also be explained by the presence of decreasing returns to scale in firms’ production technology. So previous evidence may be mixing both effects: returns to scale and public goods. This paper provides a simple methodological benchmark for distinguishing between and measuring both effects. The analysis conducted using a sample of 52 Spanish provinces for eleven years confirms the presence of decreasing returns to scale. In our data, previous interpretations of the evidence overestimate the effect of regional entrepreneurship capital as a public good on the economy.

Keywords: Entrepreneurship Capital; Regional Productivity; Scale Economies. (search for similar items in EconPapers)
JEL-codes: L26 O4 O40 R11 (search for similar items in EconPapers)
Date: 2016-04-01
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ent, nep-geo, nep-ino, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
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https://mpra.ub.uni-muenchen.de/71587/1/MPRA_paper_71587.pdf original version (application/pdf)

Related works:
Working Paper: Entrepreneurship Capital and Regional Productivity Revisited (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:71587

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