TY - JOUR

T1 - Start-up activities, individual characteristics, and the regional milieu: Lessons for entrepreneurship support policies from German micro data

AU - Wagner, Joachim

AU - Sternberg, Rolf

PY - 2004/6/1

Y1 - 2004/6/1

N2 - This paper contributes to empirical research on the role of regional policy for entrepreneurship by focusing on the link between two stylized facts that emerged from a number of studies for Germany and other countries: Entry rates differ between regions, and the propensity to become an entrepreneur is influenced by socio-demographic variables and attitudes. We develop a theoretical framework to discuss this link, and we test whether for a person of a given age, degree of schooling, attitude towards risk etc. regional variables and, therefore, regional policies, do matter for the decision to start a new business ceteris paribus. Our econometric study is based on data for 10.000 persons from a recent representative survey of the population in ten German planning regions, the Regional Entrepreneurship Monitor (REM). We use a version of the probit model that takes care of the regional stratification of the data, and the results of the nonlinear models are carefully interpreted and illustrated. We find that the propensity to step into self-employment is, among others, higher for males, unemployed, people with contacts to a role model, and with past entrepreneurial experience, who live in more densely populated and faster growing regions with higher rates of new firm formation, while risk aversion and high prices of land have the opposite impact. Interestingly, it does not matter whether the region has a "left" or "right" government. However, many implications for entrepreneurship supporting policies in German regions are discussed in the final section.

AB - This paper contributes to empirical research on the role of regional policy for entrepreneurship by focusing on the link between two stylized facts that emerged from a number of studies for Germany and other countries: Entry rates differ between regions, and the propensity to become an entrepreneur is influenced by socio-demographic variables and attitudes. We develop a theoretical framework to discuss this link, and we test whether for a person of a given age, degree of schooling, attitude towards risk etc. regional variables and, therefore, regional policies, do matter for the decision to start a new business ceteris paribus. Our econometric study is based on data for 10.000 persons from a recent representative survey of the population in ten German planning regions, the Regional Entrepreneurship Monitor (REM). We use a version of the probit model that takes care of the regional stratification of the data, and the results of the nonlinear models are carefully interpreted and illustrated. We find that the propensity to step into self-employment is, among others, higher for males, unemployed, people with contacts to a role model, and with past entrepreneurial experience, who live in more densely populated and faster growing regions with higher rates of new firm formation, while risk aversion and high prices of land have the opposite impact. Interestingly, it does not matter whether the region has a "left" or "right" government. However, many implications for entrepreneurship supporting policies in German regions are discussed in the final section.

KW - Economics

KW - Entrepreneurship

KW - Unternehmensgründung

KW - Deutschland

UR - http://www.scopus.com/inward/record.url?scp=2542443854&partnerID=8YFLogxK

UR - https://www.mendeley.com/catalogue/8d94fe10-17a7-3c69-b511-993d9b05e52d/

U2 - 10.1007/s00168-004-0193-x

DO - 10.1007/s00168-004-0193-x

M3 - Journal articles

VL - 38

SP - 219

EP - 240

JO - The Annals of Regional Science

JF - The Annals of Regional Science

SN - 0570-1864

IS - 2

ER -