Clusters of Entrepreneurship

53 Pages Posted: 28 Sep 2009 Last revised: 29 Oct 2014

See all articles by Edward L. Glaeser

Edward L. Glaeser

Harvard University - 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 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.

Suggested Citation

Glaeser, Edward L. and Kerr, William R. and Ponzetto, Giacomo A. M., Clusters of Entrepreneurship (September 2009). NBER Working Paper No. w15377. Available at SSRN: https://ssrn.com/abstract=1478795

Edward L. Glaeser (Contact Author)

Harvard University - Department of Economics ( email )

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William R. Kerr

Harvard University - Entrepreneurial Management Unit ( email )

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Giacomo A. M. Ponzetto

CREI - Universitat Pompeu Fabra ( email )

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