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Entrepreneurship in the periphery: The role of pre-entry experience and home advantage for newly founded firms

Antoine Habersetzer, Rikard Eriksson, Heike Mayer

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft - CRED

Abstract: The aim of this paper is to assess the importance of industry experience and home advantage of entrepreneurs for the competitiveness of new firms in the periphery. We assume that spinoffs founded by local entrepreneurs are generally the most competitive form of entry, and show the highest comparative advantage in peripheral regions. We use matched employer-employee data for Sweden to test the effect of industry experience and home advantage on firm survival (logistic regressions), and job growth of surviving firms (OLS regression) during the period 2004-2012. Our results suggest that industry experience is more important than home advantage for firm survival, but that firms in core areas do benefit from home advantage. Regarding job growth, home advantage seems to be more important than industry experience but with varying significance over the regional hierarchy. After controlling for survival, the positive effect on job growth of being locally embedded seems to be confined to peripheral entrepreneurs.

Keywords: Entrepreneurship; spinoffs; home advantage; periphery (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-ent, nep-sbm and nep-ure
Date: 2017-05
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