Cultural diversity and entrepreneurship: a regional analysis for Germany |
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Authors: | David Audretsch Dirk Dohse Annekatrin Niebuhr |
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Affiliation: | (1) School of Public Policy, George Mason University, Fairfax, VA, USA;(2) Department of Transport and Economics, The Royal Institute of Technology, Stockholm, Sweden;(3) School of Environmental and Public Affairs, Indiana University, Bloomington, IL, USA;(4) Weatherhead School of Management, Department of Economics, Case Western Reserve University, Cleveland, OH, USA |
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Abstract: | In this paper, we investigate the determinants of entrepreneurial activity in a cross section of German regions for the period
1998–2005. Departing from the knowledge spillover theory of entrepreneurship, the focus of our analysis is on the role of
the regional environment and, in particular, knowledge and cultural diversity. Our main hypothesis is that both, knowledge
and diversity, have a positive impact on new firm formation. As the determinants of regional firm birth rates might differ
considerably with respect to the necessary technology and knowledge input, we consider start-ups at different technology levels.
The regression results indicate that regions with a high level of knowledge provide more opportunities for entrepreneurship
than other regions. Moreover, while sectoral diversity tends to dampen new firm foundation, cultural diversity has a positive
impact on technology oriented start-ups. This suggests that the diversity of people is more conducive to entrepreneurship
than the diversity of firms. Thus, regions characterized by a high level of knowledge and cultural diversity form an ideal
breeding ground for technology oriented start-ups. |
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