Spatial heterogeneity, industry heterogeneity, and entrepreneurship

Tran, Hien and Santarelli, Enrico (2017) Spatial heterogeneity, industry heterogeneity, and entrepreneurship. The Annals of Regional Science, 59 (1). pp. 69-100. ISSN 1432-0592 DOI https://doi.org/10.1007/s00168-017-0819-4

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Abstract

The prevalence of entrepreneurship varies not only across regions but also among industries. Using a unique panel dataset of 60 two-digit industries across 64 provinces from 2000 to 2010 in Vietnam, we investigate the importance of spatial and sectoral heterogeneity in an analysis of the determinants of entrepreneurship and empirically explore the interaction effect of geographic conditions and industry dynamism. Overall, our results confirm the significance of industry structural variables and their joint effect with geographic conditions in fostering new firm formation. Particularly, (i) growth-driven entries are generally higher in provinces that offer higher salaries; (ii) technology-intensive industries within regions that have strong knowledge spillover effects are appealing to new entries. Others noteworthy findings include: (i) ‘necessity entrepreneurship’ is prevalent in Vietnam, but limited to extractive and service industries that are typically labor intensive; (ii) firms tend to concentrate more in agglomerated locations. This effect, however, evaporates for high-tech industries; and (iii) industry profitability and niche dynamism all play a crucial role in stimulating new start-ups. We apply the system generalized method of moments to obtain empirical evidence in the study.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Business and Management
Date Deposited: 07 Mar 2017 16:04
URI: http://repository.edgehill.ac.uk/id/eprint/8796

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