National Business Regulations and City Entrepreneurship in Europe: A Multilevel Nested Analysis

Abstract

This article provides and tests a theoretical framework with a multilevel (country–city) nested model to analyze the relationship between national business regulations (NBRs) and city level entrepreneurship. While public interest theory predicts a positive relationship between NBR and city level entrepreneurship, public choice theory predicts the opposite, a negative relationship. Based on multilevel analysis for a matched country–city panel of 228 cities across 20 European countries for the years 2004 to 2009, the empirical evidence from panel data estimation explains how changes in NBRs influence changes in city level entrepreneurial activity over time.

Knowledge frontiers and boundaries in entrepreneurship research

“…3 Entrepreneurship and knowledge: bridging a micro-industry-macro divide Entrepreneurship policy is by nature multi-level and multi-dimensional (Audretsch et al 2018). It can be understood at the individual level of analysis (Casson 2005;Autio et al 2014), regional level (Audretsch and Lehmann 2005;Audretsch et al 2015a, b), industry level (Qian 2018; Colombelli and Quatraro 2018), national level (Acs et al 2014(Acs et al , 2017Audretsch and Lehmann 2016), and international level, resulting in a complex multi-level structure of entrepreneurship activities (Estrin et al 2013;Belitski and Desai 2016b).…”

“…This paradox of the firm knowledge production function was described by Audretsch (1995) and later by and Acs et al (2013) as the Knowledge Spillover Theory of Entrepreneurship (KSTE). The major thrust of this and subsequent work is that firms endogenously seek knowledge in a regional Lehmann 2005, 2006), industrial (Qian and Acs 2013), and ecosystem context (Audretsch et al 2018;Stam 2018), aiming to create and recombine existing knowledge available in the economy into knowledge inputs, which can lead to the generation of new products and services (Ghio et al 2015). Acs et al (2013) and Ghio et al (2015) empirically demonstrated how the knowledge production function works for entrepreneurs.…”

“…Contemporary entrepreneurial activity understands characteristics of the knowledge frontier to include the following: availability of assets, diversity, creativity, entrepreneurial cognition, opportunity. Contemporary entrepreneurial activity understands the antecedents of the knowledge frontier to include the following: in-house investment in knowledge (Cassiman and Veugelers 2002), development of regional and global entrepreneurship ecosystems (Zahra and Nambisan 2011;Sussan and Acs 2017;Audretsch et al 2018;Stam 2018), developing entrepreneurial culture and orientation (Fritsch and Mueller 2004;Kuratko et al 2015) and co-creation of innovation with stakeholders, such as exploratory types of innovation (Miller et al 2014(Miller et al , 2016Scandura 2016). Knowledge frontiers facilitate a gain in competitive advantage through knowledge assimilation, integration and commercialization by entrepreneurs (Audretsch and Lehmann 2005;, and enabling an entrepreneur to speed movement toward the production possibility frontier (Mickiewicz et al 2017).…”

“…New and young firms have been shown to drive job creation (Haltiwanger et al 2013), promote economic growth and innovation (Fritsch 2013), introduce new products and markets (Knight 2001), and push technological evolution in regions (Fritsch and Mueller 2004). Given differences in entrepreneurship activity between and within regions (Audretsch et al 2018;Bosma et al 2008;Reynolds et al 2007), scholars and policymakers seek to identify factors at various levels (i.e., industry, regional, national) to explain these differences.…”

Advancing the Frontiers in Ethnic Entrepreneurship Studies

“…The mixed embeddedness concept that acknowledges that ethnic entrepreneurs are embedded in both social contexts and opportunity structures, could be one way to operationalise such a multi-layered approach (Kloosterman & Rath 2001). While in quantitative research multilevel approaches of entrepreneurship are on the rise (Audretsch et al 2018), for qualitative research this would mean data collection of contexts and persons in multiple social arenas in which the entrepreneur is embedded (Rath 2002).…”