Authors
Edward L Glaeser, Sari Pekkala Kerr, William R Kerr
Publication date
2015/5/1
Journal
Review of Economics and Statistics
Volume
97
Issue
2
Pages
498-520
Publisher
The MIT Press
Description
We study entrepreneurship and growth through the lens of U.S. cities. Initial entrepreneurship correlates strongly with urban employment growth, but endogeneity bedevils interpretation. Chinitz (1961) hypothesized that coal mines near cities led to specialization in industries, like steel, with significant scale economies and that those big firms subsequently damped entrepreneurship across several generations. Proximity to historical mining deposits is associated with reduced entrepreneurship for cities in the 1970s and onward in industries unrelated to mining. We use historical mines as an instrument for our modern entrepreneurship measures and find a persistent link between entrepreneurship and city employment growth.
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