Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/24928
Authors: 
Ács, Zoltán J.
Kallas, Kadri
Year of Publication: 
2007
Series/Report no.: 
Papers on entrepreneurship, growth and public policy 0307
Abstract: 
Motivated by differences in new-firm survival across regions, this paper explores the impact of regional human capital on new-firm survival rates. New-firm survival is interpreted through formation rates of surviving versus closed firms in the service sector. By incorporating knowledge spillovers through a geographical variation model for Labor Market Areas, we empirically test the relationship between regional human capital stocks and new-firm survival. The expected positive relationship between regional human capital and new-firm survival is supported for the period 1993-1995, but is not as strong for the recession period 1990-1992. Controlling for human capital, the new-firm survival rate is negatively related to service sector specialization and positively related to all industry intensity, suggesting that city size and diversity may be an important determinant of new-firm survival in both periods.
Subjects: 
New-Firm Survival
Human Capital
Knowledge Spillovers
Entrepreneurship
Labor Market Area
JEL: 
R1
L80
J24
M13
O3
Document Type: 
Working Paper

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