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What determines entrepreneurial clusters?

Schivardi, Fabiano - Guiso, Luigi (2006) What determines entrepreneurial clusters? Working Paper. CRENoS.

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Official URL: http://www.crenos.it/working/pdf/06-16.pdf

Abstract

We contrast two potential explanations of the substantial differences in entrepreneurial activity observed across geographical areas: entry costs and external effects. We extend the Lucas model of entrepreneurship to allow for heterogeneous entry costs and for externalities that shift the distribution of entrepreneurial talents. We show that these assumptions have opposite predictions on the relation between entrepreneurial activity and firm level TFP: with different entry costs, in areas with more entrepreneurs firms’ average productivity should be lower and vice versa. We test these implications on a sample of Italian firms and unambiguously reject the entry costs explanation in favor of the externalities one. We also investigate the sources of external effects, finding robust evidence that learning externalities are an important determinant of cross-sectional differences in entrepreneurial activity

Item Type:Technical Report / Working Paper / Project Report (Working Paper)
Publisher:CRENoS
Date:2006
Institution:Universita' degli Studi di Cagliari
Divisions:Centri > CRENoS Centro Ricerche Economiche Nord Sud
Subjects:Area 13 - Scienze economiche e statistiche > SECS-P/08 Economia e gestione delle imprese
Area 13 - Scienze economiche e statistiche > SECS-P/07 Economia aziendale
Uncontrolled Keywords:Entrepreneurship, clustering, agglomeration economies
ID Code:203
Deposited On:07 Nov 2008 11:27

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