University Knowledge Spillovers & Regional Start-Up Rates: Supply and Demand Side Factors

Advances in Entrepreneurship, Firm Emergence, and Growth, Vol. 16, Forthcoming

39 Pages Posted: 21 Mar 2014

See all articles by Karin Hellerstedt

Karin Hellerstedt

Jonkoping University - Jonkoping International Business School (JIBS)

Karl Wennberg

Linkoping University - Institute for Analytical Sociology (IAS)

Lars Frederiksen

Aarhus University - School of Business and Social Sciences

Date Written: March 19, 2014

Abstract

This paper investigates regional start-up rates in the knowledge intensive services and high-tech industries. Integrating insights from economic geography and population ecology into the literature on entrepreneurship, we develop a theoretical framework which captures how both supply- and demand-side factors mold the regional bedrock for start-ups in knowledge intensive industries. Using multi-level data of all knowledge intensive start-ups across 286 Swedish municipalities between 1994 and 2002 we demonstrate how characteristics of the economic and political milieu within each region influence the ratio of firm births. We find that economically affluent regions dominate entrepreneurial activity in terms of firm births, yet a number of much smaller rural regions also revealed high levels of start-ups. Knowledge spillovers from universities and firm R&D strongly affect the start-up rates for both knowledge intensive manufacturing and knowledge intensive services firms. However, the start-up rate of knowledge-intensive service firms is tied more strongly to the supply of highly educated individuals and the political regulatory regime within the municipality. This suggests that knowledge intensive service-start-ups are more susceptible to both demand-side and supply-side context than manufacturing start-ups. Our study contributes to the growing stream of research that explains entrepreneurial activity as shaped by contextual factors, most notably educational institutions that contribute to technology start-ups.

Keywords: Start-ups, Spillovers, Universities, R&D, Political regime

JEL Classification: L26, M13, R12, P25

Suggested Citation

Hellerstedt, Karin and Wennberg, Karl and Frederiksen, Lars, University Knowledge Spillovers & Regional Start-Up Rates: Supply and Demand Side Factors (March 19, 2014). Advances in Entrepreneurship, Firm Emergence, and Growth, Vol. 16, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2411798

Karin Hellerstedt

Jonkoping University - Jonkoping International Business School (JIBS) ( email )

Jönköping, 55111
Sweden

Karl Wennberg (Contact Author)

Linkoping University - Institute for Analytical Sociology (IAS) ( email )

Norrköping, 601 74
Sweden

Lars Frederiksen

Aarhus University - School of Business and Social Sciences ( email )

Bartholins Allé 10
Building 1327, room 222
DK-8000 Aarhus, 8000
Denmark

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