Spatial heterogeneity, industry heterogeneity, and entrepreneurship

Abstract

The prevalence of entrepreneurship varies not only across regions but also among industries. Using a unique panel dataset of 60 two-digit industries across 64 provinces from 2000 to 2010 in Vietnam, we investigate the importance of spatial and sectoral heterogeneity in an analysis of the determinants of entrepreneurship and empirically explore the interaction effect of geographic conditions and industry dynamism. Overall, our results confirm the significance of industry structural variables and their joint effect with geographic conditions in fostering new firm formation. Particularly, (i) growth-driven entries are generally higher in provinces that offer higher salaries; (ii) technology-intensive industries within regions that have strong knowledge spillover effects are appealing to new entries. Others noteworthy findings include: (i) 'necessity entrepreneurship' is prevalent in Vietnam, but limited to extractive and service industries that are typically labor intensive; (ii) firms tend to concentrate more in agglomerated locations. This effect, however, evaporates for high-tech industries; and (iii) industry profitability and niche dynamism all play a crucial role in stimulating new start-ups. We apply the system generalized method of moments to obtain empirical evidence in the study. JEL Classification

What have Vietnamese scholars learned from researching entrepreneurship? A Systematic review

“…Given that existing policies are not yet protective of the rights and needs of firms (Hoa and Khoi, 2017;Thai and Ho, 2010), more attention should be given to better allocate national resources among state and non-state sectors to eradicate any discrimination and promote efficiency and productivity of both sectors (Nguyen and Mort, 2016;Thi Nhung, Gan and Hu, 2015). Specific suggestions include reducing tax and improving loan access (Hoa and Khoi, 2017), decentralizing policy-making to better support SMEs (Cox and Le, 2014;Le et al, 2016;Paswan and Tran, 2012;Tran and Santarelli, 2017), and increasing trust in the government at the community level (Dut, 2015;Nguyen and Wongsurawat, 2012;Phuong, 2014). (Dang et al, 2016;Nguyen and Nordman, 2018;Nguyen and Mort, 2016;Perri and Chu, 2012;Vuong, 2016a;Vuong and Napier, 2015) 2 Resources management 53 (Chu and Luke, 2012;Duy and Oanh, 2015;Nguyen et al, 2015;O'Cass et al, 2012;Pham and Talavera, 2018;Turkina & Thi Thanh Thai, 2013;Thai and Ho, 2010;Vuong, Do and Vuong, 2016a) 3 Business efficiency 38 (Hiep and Van Vu, 2015;Hoa and Khoi, 2017;Lensink and Pham, 2012;Nguyen et al, 2013;Santarelli and Tran, 2013;Tran and Santarelli, 2017;Walder and Nguyen, 2008) 4 Innovation and creativity 38 (Brundenius and Le, 2014;Kiura et al, 2014;Le et al, 2018a;…”

“…Specific suggestions include reducing tax and improving loan access (Hoa and Khoi, 2017), decentralizing policy-making to better support SMEs (Cox and Le, 2014;Le et al, 2016;Paswan and Tran, 2012;Tran and Santarelli, 2017), and increasing trust in the government at the community level (Dut, 2015;Nguyen and Wongsurawat, 2012;Phuong, 2014). (Dang et al, 2016;Nguyen and Nordman, 2018;Nguyen and Mort, 2016;Perri and Chu, 2012;Vuong, 2016a;Vuong and Napier, 2015) 2 Resources management 53 (Chu and Luke, 2012;Duy and Oanh, 2015;Nguyen et al, 2015;O'Cass et al, 2012;Pham and Talavera, 2018;Turkina & Thi Thanh Thai, 2013;Thai and Ho, 2010;Vuong, Do and Vuong, 2016a) 3 Business efficiency 38 (Hiep and Van Vu, 2015;Hoa and Khoi, 2017;Lensink and Pham, 2012;Nguyen et al, 2013;Santarelli and Tran, 2013;Tran and Santarelli, 2017;Walder and Nguyen, 2008) 4 Innovation and creativity 38 (Brundenius and Le, 2014;Kiura et al, 2014;Le et al, 2018a;Nam et al, 2017;Tuan, 2015;Vuong and Napier, 2015;Vuong et al, 2013) 5 Gender/Sex 8 (Le et al, 2016;Nguyen, Frederick and Nguyen, 2014a;Oosterhoff and Hoang, 2018;…”

START-UP OR SCALE-UP?: An Approach through Economic Impact

“…The debate on this concept has long been open ever since (Mokaya, Namusonge, & Sikalieh, 2012), with no definitive understanding having been reached as of now. Thus, to measure entrepreneurship at the regional or industrial level, much of the industrial organization literature refers to the foundation and emergence of new enterprises (Acs, Desai, & Hessels, 2008;Audretsch, Kuratko, & Link, 2015;Tran & Santarelli, 2017).…”

What have Vietnamese scholars learned from researching entrepreneurship?: A systematic review

“…There have also been suggestions for more decentralization of policy to better support SMEs due to the regional and industrial variation in determinants of firms' productivity (Cox and Le, 2014;Le et al, 2016;Paswan and Tran, 2012;Tran and Santarelli, 2017). For example, entrepreneurs' perceived main determinants of firms' performance show considerable variability among major cities of Vietnam.…”