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Documents inThese Discussion Papers often represent preliminary or incomplete work, circulated to encourage discussion and comment. Citation and use of such a paper should take account of its provisional character. In this paper we investigate the determinants of entrepreneurial activity in a cross section of German regions for the period 1998-2005. Departing from the knowledge spillover theory of entrepreneurship, the focus of our analysis is on the role of the regional environment and, in particular, knowledge and cultural diversity. Our main hypothesis is that both, knowledge and diversity, have a positive impact on new firm formation. As the determinants of regional firm birth rates might differ considerably with respect to the necessary technology and knowledge input of new businesses, we consider start-ups at different technology levels. The regression results indicate that regions with a high level of knowledge provide more opportunities for entrepreneurship than other regions. Moreover, while sectoral diversity tends to dampen new firm foundation, cultural diversity has a positive and highly significant impact on technology oriented start-ups. This suggests that the diversity of people is more conducive to entrepreneurship than the diversity of firms. We conclude that regions characterized by a high level of knowledge and cultural diversity form an ideal breeding ground for technology oriented start-ups.JEL Classification: M13, O18 and R11
This study examines how modes of entrepreneurship education (active, such as business simulations, versus reflective, such as theory lectures) -alone and in interaction with the universities' regional context -affect students' self-employment intentions. Results from a cross-level analysis show that active modes are, irrespective of the regional context, positively related with intentions and attitudes towards entrepreneurship, whereas the effect of reflective modes is contingent on the regional context. The findings have important implications for the ongoing discussion on the teachability of entrepreneurship, the design of educational programmes and for future research.
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