Authors
Edward L Glaeser, William R Kerr
Publication date
2009/9
Journal
Journal of Economics & Management Strategy
Volume
18
Issue
3
Pages
623-663
Publisher
Blackwell Publishing Inc
Description
Why are some places more entrepreneurial than others? We use Census Bureau data to study local determinants of manufacturing startups across cities and industries. Demographics have limited explanatory power. Overall levels of local customers and suppliers are only modestly important, but new entrants seem particularly drawn to areas with many smaller suppliers, as suggested by Chinitz (1961). Abundant workers in relevant occupations also strongly predict entry. These forces plus city and industry fixed effects explain between 60% and 80% of manufacturing entry. We use spatial distributions of natural cost advantages to address partially endogeneity concerns.
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