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Social Networks, Funding, and Regional Advantages in Technology Entrepreneurship

36 Pages Posted: 4 Oct 2015 Last revised: 1 Jun 2016

John Butler

University of Texas at Austin - Red McCombs School of Business

Rajiv Garg

University of Texas at Austin - Department of Information, Risk and Operations Management

Bryan Stephens

University of Texas at Austin - Red McCombs School of Business

Date Written: August 1, 2015

Abstract

Economic advancement, funding opportunities and social networks influence entrepreneurs when choosing locations for startups. In this study, we extend the literature on regional advantage by empirically analyzing factors that influence an entrepreneur’s startup location choice. Using economic indicators made publicly available by the U.S. government, investment information from CrunchBase, and LinkedIn professional histories and network data, we study regional and personal factors influencing location choice. Entrepreneurs have choices to establish a startup in their current location, a new location, or move to a new location, work as an employee for a short time then create the startup there. From our analysis, we find that funding rounds per year, employment, unemployment rate and GDP play a significant role in influencing location selection. Also, regional social network density and tenure in location significantly influence entrepreneurs when choosing a startup location. Finally, implications for policy development and further research are discussed.

Keywords: Social Networks, Entrepreneurship, Regional Advantage, Startups, Innovation

JEL Classification: M13, D71, D80, O15, O30, O51, R23

Suggested Citation

Butler, John and Garg, Rajiv and Stephens, Bryan, Social Networks, Funding, and Regional Advantages in Technology Entrepreneurship (August 1, 2015). Available at SSRN: https://ssrn.com/abstract=2668918 or http://dx.doi.org/10.2139/ssrn.2668918

John Butler

University of Texas at Austin - Red McCombs School of Business ( email )

Austin, TX 78712
United States

Rajiv Garg (Contact Author)

University of Texas at Austin - Department of Information, Risk and Operations Management ( email )

CBA 5.202
Austin, TX 78712
United States

HOME PAGE: http://www.RajivGarg.org

Bryan Stephens

University of Texas at Austin - Red McCombs School of Business ( email )

Austin, TX 78712
United States

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