Personal and Regional Determinants of Entrepreneurial Activities: Empirical Evidence from the Rem Germany

23 Pages Posted: 6 Dec 2002

See all articles by Joachim Wagner

Joachim Wagner

University of Lueneburg - Institute of Economics; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics; IZA Institute of Labor Economics

Rolf Sternberg

University of Cologne - Institute for Economic Policy

Date Written: November 2002

Abstract

This paper contributes to empirical research in entrepreneurship by focusing on the link between two stylized facts that emerged from a number of studies for Germany and other countries: Entry rates differ between regions, and the propensity to become an entrepreneur is influenced by socio-demographic variables and attitudes. We develop a theoretical framework to discuss this link, and we test whether for a person of a given age, degree of schooling, attitude towards risk etc. regional variables do matter for the decision to start a new business ceteris paribus. Our econometric study is based on data for 10.000 persons from a recent representative survey of the population in ten German planning regions, the Regional Entrepreneurship Monitor (REM). We use a version of the probit model that takes care of the regional stratification of the data, and the results of the nonlinear models are carefully interpreted and illustrated. We find that the propensity to step into self-employment is, among others, higher for males, unemployed, people with contacts to a role model, and with past entrepreneurial experience, who live in more densely populated and faster growing regions with higher rates of new firm formation, while risk aversion and high prices of land have the opposite impact.

Keywords: Nascent Entrepreneurs, Germany, Regions

JEL Classification: J23, R12

Suggested Citation

Wagner, Joachim and Sternberg, Rolf, Personal and Regional Determinants of Entrepreneurial Activities: Empirical Evidence from the Rem Germany (November 2002). Available at SSRN: https://ssrn.com/abstract=358100

Joachim Wagner (Contact Author)

University of Lueneburg - Institute of Economics ( email )

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IZA Institute of Labor Economics

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Rolf Sternberg

University of Cologne - Institute for Economic Policy ( email )

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Cologne, D-50969
Germany

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