SSE/EFI Working Paper Series in Business Administration
How do entrepreneurs in clusters contribute to economic growth?
() and Göran Lindqvist
Abstract: This paper investigates the long-term survival and
performance of new entrepreneurial firms, comparing firms located within
regional clusters with those located outside of clusters.We use matched
employee-employer databases to investigate all Swedish firms started in the
telecom and consumer electronic s, financial services, information
technology, medical equipment, and pharmaceuticals and biotech sectors (N =
4,397). We follow these firms from 1993 to 2002 and measure their
contribution to local economic vitality in term of job creation, payment of
taxes, and payment of salaries to employees.
Controlling for factors
such as firm size, age, and absorptive innovative capabilities, we find
strong empirical evidence that being located within a cluster has positive
effects on the survival of new firms. We also find that clustered firm
creates more jobs, higher tax payments, and higher wages to employees. The
effects are consistent across alternative measures of agglomeration and
different regional levels.
Thid study contributes to the literatures on
entrepreneurship and economic geography. By measuring the economic
contributions of clustered and non-clustered firms, the empirical evidence
also provides support for basing economic policies on clusters.
Keywords: Clusters; Entrepreneurship; Economic Development; (follow links to similar papers)
21 pages, June 7, 2007
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- This paper is published as:
Wennberg, Karl and Göran Lindqvist, (2010), 'The effect of clusters on the survival and performance of new firms', Small Business Economics, Vol. 34, April, No. 3, pages 221-241
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