Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines

24 Pages Posted: 9 Aug 2012 Last revised: 6 Oct 2015

See all articles by Edward L. Glaeser

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Sari Pekkala Kerr

Wellesley College (WCW)

William Kerr

Harvard University - Entrepreneurial Management Unit

Multiple version iconThere are 3 versions of this paper

Date Written: May 2015

Abstract

We study entrepreneurship and growth through the lens of U.S. cities. Initial entrepreneurship correlates strongly with urban employment growth, but endogeneity bedevils interpretation. Chinitz (1961) hypothesized that coal mines near cities led to specialization in industries, like steel, with significant scale economies and that those big firms subsequently damped entrepreneurship across several generations. Proximity to historical mining deposits is associated with reduced entrepreneurship for cities in the 1970s and onward in industries unrelated to mining. We use historical mines as an instrument for our modern entrepreneurship measures and find a persistent link between entrepreneurship and city employment growth.

Keywords: Entrepreneurship, Industrial Organization, Chinitz, Agglomeration, Clusters, Cities, Mines

JEL Classification: L0, L1, L2, L6, N5, N9, O1, O4, R0, R1

Suggested Citation

Glaeser, Edward L. and Kerr, Sari Pekkala and Kerr, William R., Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines (May 2015). Review of Economics and Statistics, Vol. 2, No. 97, 2015; Harvard Business School Entrepreneurial Management Working Paper No. 13-015. Available at SSRN: https://ssrn.com/abstract=2127249 or http://dx.doi.org/10.2139/ssrn.2127249

Edward L. Glaeser

Harvard University - Department of Economics ( email )

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Brookings Institution

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National Bureau of Economic Research (NBER)

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Sari Pekkala Kerr

Wellesley College (WCW) ( email )

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Wellesley, MA 02181
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William R. Kerr (Contact Author)

Harvard University - Entrepreneurial Management Unit ( email )

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