Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/85927 
Year of Publication: 
2001
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 01-074/3
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
In this paper, we develop two hypotheses: First, regional innovation efforts have a positive impact on regional knowledge based entrepreneurial activity. Second, knowledge based entrepreneurship positively affects regional economic performance. We test these hypotheses using county level data from West Germany, employing a structural equation model to analyze the relationships between latent variables. Our empirical analysis provides evidence supporting both hypotheses. In particular, our results suggest that innovation efforts have an indirect effect on economic performance via entrepreneurship. This indirect effect is neglected in existing empirical studies focusing on the direct effect of innovation on economic performance.
Subjects: 
entrepreneurship
unemployment
economic development
Gibrat's Law
JEL: 
L11
M13
O11
Document Type: 
Working Paper

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