The Localization of Entrepreneurship Capital - Evidence from Germany

20 Pages Posted: 18 Oct 2007

See all articles by David B. Audretsch

David B. Audretsch

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Max Keilbach

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics

Date Written: July 2, 2007

Abstract

Whereas initially physical capital and later, knowledge capital were viewed as crucial for growth, more recently a very different factor, entrepreneurship capital, has emerged as a driving force of economic growth. In this paper, we define a region's capacity to create new firms start-ups as the region's entrepreneurship capital. We then investigate the local embeddedness of this variable and which variables have an impact on this variable. Using data for Germany, we find that knowledge-based entrepreneurship capital is driven by local levels of knowledge creation and the acceptance of new ideas, indicating that local knowledge flows play an important role. Low-tech entrepreneurship capital is rather increased by regional unemployment and driven by direct incentives such as subsidies. All three measures are locally clustered, indicating that indeed, entrepreneurship capital is a phenomenon that is driven by local culture, and is therefore locally bounded.

Keywords: Entrepreneurship capital, Local Clusters, Knowledge Spillovers, Spatial Econometrics

JEL Classification: L60, O30, G30

Suggested Citation

Audretsch, David B. and Keilbach, Max, The Localization of Entrepreneurship Capital - Evidence from Germany (July 2, 2007). Jena Economic Research Paper No. 2007-029, Available at SSRN: https://ssrn.com/abstract=1021161 or http://dx.doi.org/10.2139/ssrn.1021161

David B. Audretsch (Contact Author)

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

Max Keilbach

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany
+49 - 3641 - 68 67 70 (Phone)
+49 - 3641 - 68 67 10 (Fax)

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