Regional knowledge, entrepreneurial culture, and innovative start-ups over time and space―an empirical investigation

Abstract

We investigate the role of entrepreneurship culture and the historical knowledge base of a region on current levels of new business formation in innovative industries. The analysis is for German regions and covers the time period 1907-2014. We find a pronounced positive relationship between high levels of historical self-employment in science-based industries and new business formation in innovative industries today. This long-term legacy effect of entrepreneurial tradition indicates the prevalence of a regional culture of entrepreneurship. Moreover, local presence and geographic proximity to a technical university founded before the year 1900 is positively related to the level of innovative start-ups more than a century later. The results show that a considerable part of the knowledge that constitutes an important source of entrepreneurial opportunities is deeply rooted in history. We draw conclusions for policy and for further research.

Taxes, start-up costs, and innovative entrepreneurship

“…While we often see changes in the start-up costs in this period (Table A.2 in the electronic supplementary material), organizations behind start-up regulations such as the chamber of commerce usually take much more time to change (Van de Vliert et al 2016). Such organizations may reduce start-up costs in a short period, but other regulations (e.g., administrative procedures) as well as informal institutions around start-up costs (e.g., norms and culture) change with a much slower pace (Fritsch and Wyrwich 2018).…”

“…In addition, we add to the regression model a number of individual and country-level control variables that are common determinants of innovative entrepreneurship (Acs and Audretsch 1987;Koellinger 2008;Anokhin and Schulze 2009;Autio et al 2014;Fritsch and Wyrwich 2018). At the individual level, the following variables are included: formal education (a dummy variable that indicates whether entrepreneurs have a university education), entrepreneurial networks (a dummy variable indicating whether the entrepreneur knows someone personally who started a new business in the last 2 years), perception of entrepreneurial skills (a dummy variable indicating whether the entrepreneur perceives him-or herself to have relevant skills, knowledge, and experience for setting up a business), recent prior entrepreneurship experience (a dummy variable that indicates whether someone has quit as an entrepreneur in the past 12 months), established business ownership (a dummy variable that equals one if the respondent owns a business older than 42 months), and gender (a dummy variable that equals one for males).…”

Financial and Institutional Reforms for an Entrepreneurial Society

“…Keeping this in mind, we conclude that any policy intervention must be carefully tailored to the existing institutional framework , and changing the institutional setting may have unintended consequences even on the type of entrepreneurship that a specific reform was intended to foster (Operti 2018). However, this does not mean we should let history run its course and hope luck will be on our side (Fritsch and Wyrwich 2018). Targeted interventions in formal institutions can be made and designed to promote a more entrepreneurial culture.…”

“…In this special issue, the persistence of spatial differences in entrepreneurship activity are studied by Fritsch and Wyrwich (2018), who explore the role of the historical knowledge base and entrepreneurial culture of a region on current levels of new business formation in innovative industries in German regions for the period 1907-2014. Their findings support a pronounced positive relationship between high levels of historical selfemployment in science-based industries and new business formation in innovative industries today.…”

Occupational gender segregation and economic growth in U.S. local labor markets, 1980 through 2010

“…and urban scholars have increasingly focused on local labor markets as crucial centers of economic growth [21][22][23][24][25][26][27][28][29]. These scholars argue that labor markets with conditions that facilitate the exchange of ideas between workers are best positioned for innovation and growth in the creative economy.…”