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Why so many local entrepreneurs?

Michelacci, Claudio and Silva, Olmo (2007) Why so many local entrepreneurs? Review of Economics and Statistics, 89 (4). pp. 615-633. ISSN 0034-6535

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Abstract

We document that the fraction of entrepreneurs working in the region where they were born is significantly higher than the corresponding fraction for dependent workers. This is more pronounced in more developed regions and positively related to the degree of local financial development. Firms created by locals are bigger, operate with more capital-intensive technologies, and obtain greater financing per unit of capital invested, than firms created by nonlocals. This suggests that there are so many local entrepreneurs because locals can better exploit the financial opportunities available in the region where they were born. This helps to explain how local financial development causes persistent disparities in entrepreneurial activity, technology, and income.

Item Type: Article
Official URL: http://www.mitpressjournals.org/rest
Additional Information: © 2007 The President and Fellows of Harvard College and the Massachusetts Institute of Technology
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 15 Dec 2010 09:50
URL: http://eprints.lse.ac.uk/30768/

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