Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109120
Authors: 
Andersson, Martin
Henrekson, Magnus
Year of Publication: 
2014
Series/Report no.: 
IFN Working Paper 1020
Abstract: 
We review and assess the role local institutional framework conditions play in fostering local entrepreneurship. The basic premise is that entrepreneurship is a central driver of economic renewal and change, and that institutions affect both the supply and direction of entrepreneurship. While local institutions always develop and operate against the backdrop of national institutional frameworks, in particular in non-federal states, our review shows that there is plenty of room for local initiatives and policies to influence the entrepreneurial climate locally. This pertains to both formal (e.g., taxes, regulations and stringency of enforcement) and informal (e.g., attitudes and social legitimacy) institutions. We further argue that the local institutional environment is essential in any local policy aimed to foster productive (high-impact) entrepreneurship. Favorable local institutions not only increase the odds that a region develops or manage to attract entrepreneurial incumbents, but also the odds that a region reaps the full potential of hosting entrepreneurial and knowledge-intensive activities.
Subjects: 
Business climate
Entrepreneurship
Institutions
Job creation
Local policies
Startups
Regulations
Entrepreneurship culture
JEL: 
D22
H70
L26
M13
O43
R38
Document Type: 
Working Paper

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