Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines

67 Pages Posted: 12 Apr 2013

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: April 1, 2013

Abstract

Measures of entrepreneurship, such as average establishment size and the prevalence of start-ups, correlate strongly with employment growth across and within metropolitan areas, but the endogeneity of these measures bedevils interpretation. Chinitz (1961) hypothesized that coal mines near Pittsburgh led that city to specialization in industries, like steel, with significant scale economies and that those big firms led to a dearth of entrepreneurial human capital across several generations. We test this idea by looking at the spatial location of past mines across the United States: proximity to historical mining deposits is associated with bigger firms and fewer start-ups in the middle of the 20th century. We use mines as an instrument for our entrepreneurship measures and find a persistent link between entrepreneurship and city employment growth; this connection works primarily through lower employment growth of start-ups in cities that are closer to mines. These effects hold in cold and warm regions alike and in industries that are not directly related to mining, such as trade, finance and services. We use quantile instrumental variable regression techniques and identify mostly homogeneous effects throughout the conditional city growth distribution.

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 (April 1, 2013). US Census Bureau Center for Economic Studies Paper No. CES-WP- 13-15, Available at SSRN: https://ssrn.com/abstract=2247635 or http://dx.doi.org/10.2139/ssrn.2247635

Edward L. Glaeser (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Room 315A
Cambridge, MA 02138
United States
617-496-2150 (Phone)
617-496-1722 (Fax)

Brookings Institution

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Sari Pekkala Kerr

Wellesley College (WCW) ( email )

106 Central St.
Wellesley, MA 02181
United States

William R. Kerr

Harvard University - Entrepreneurial Management Unit ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
117
Abstract Views
1,191
Rank
132,622
PlumX Metrics