Clusters of Entrepreneurship

54 Pages Posted: 16 Sep 2009  

Edward L. Glaeser

Harvard University - John F. Kennedy School of Government, Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

William R. Kerr

Harvard University - Entrepreneurial Management Unit

Giacomo A. M. Ponzetto

CREI - Universitat Pompeu Fabra

Multiple version iconThere are 3 versions of this paper

Date Written: September 15, 2009

Abstract

Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people.

Keywords: entrepreneurship, industrial organization, Chinitz, agglomeration, clusters, cities

JEL Classification: J2, L, L1, L2, L6, O3, R2

Suggested Citation

Glaeser, Edward L. and Kerr, William R. and Ponzetto, Giacomo A. M., Clusters of Entrepreneurship (September 15, 2009). Harvard Business School Entrepreneurial Management Working Paper No. 10-019. Available at SSRN: https://ssrn.com/abstract=1473767 or http://dx.doi.org/10.2139/ssrn.1473767

Edward L. Glaeser

Harvard University - John F. Kennedy School of Government, Department of Economics ( email )

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William R. Kerr (Contact Author)

Harvard University - Entrepreneurial Management Unit ( email )

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Giacomo A. M. Ponzetto

CREI - Universitat Pompeu Fabra ( email )

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Spain
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