Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283589 
Year of Publication: 
2023
Series/Report no.: 
ZEW Discussion Papers No. 23-067
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
New business formation is a key driver of regional transformation and development. While we know that a region's attractiveness for new businesses depends on its resources, infrastructure, and human capital, we know little about the role of local business networks in promoting or impeding the birth of new firms. We construct local business networks connecting more than 350 million nodes consisting of managers, owners and firms using administrative data on all German businesses from 2002 to 2020. Differentiating between serial and de-novo entrepreneurs, we show a positive but decreasing relation between a region's connectedness and firm entry of serial entrepreneurs. Networks are, moreover, positively linked to firm survival. Relating our findings to a measure of ownership concentration, we show that networks provide additional explanations for regional variation in new business formations. These patterns are robust to synthetic instrumental variable estimations
Subjects: 
New Firm Formation
Business Networks
Serial Entrepreneurship
RegionalDynamics
Ownership Concentration
JEL: 
L14
L26
M13
O31
Document Type: 
Working Paper

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