Industry structure, entrepreneurship, and culture: An empirical analysis using historical coalfields

By Michael Stuetzer, M. Obschonka, David B. Audretsch, Michael Wyrwich, Peter J. Rentfrow, Mike Coombes, L. Shaw-Taylor, M. Satchell. 2016

198 citations recorded by the source corpus.

There is mounting evidence demonstrating that entrepreneurship is spatially clustered and that these spatial differences are quite persistent over long periods of time. However, especially the sources of that persistence are not yet well-understood, and it is largely unclear whether persistent differences in entrepreneurship are reflected in differences in entrepreneurship culture across space as it is often argued in the literature. We approach the cluster phenomenon by theorizing that a historically high regional presence of large-scale firms negatively affects entrepreneurship, due to low levels of human capital and entrepreneurial skills, fewer opportunities for entry and entrepreneurship inhibiting formal and informal institutions. These effects can become self-perpetuating over time, ultimately resulting in persistent low levels of entrepreneurship activity and entrepreneurship culture. Using data from Great Britain, we analyze this long-term imprinting effect by using the distance to coalfields as an exogenous instrument for the regional presence of large-scale industries. IV regressions show that British regions with high employment shares of large-scale industries in the 19th century, due to spatial proximity to coalfields, have lower entrepreneurship rates and weaker entrepreneurship culture today. We control for an array of competing hypotheses like agglomeration forces, the regional knowledge stock, climate, and soil quality. Our main results are robust with respect to inclusion of these control variables and various other modifications which demonstrates the credibility of our empirical identification strategy. A mediation analysis reveals that a substantial part of the impact of large-scale industries on entrepreneurship is through human capital.

Subfields: Economics and Econometrics, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/7d42df5b5d4f678a2d40b7a49ea3df40c27bf0d9

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Citations in the corpus

Entrepreneurship culture, knowledge spillovers and the growth of regions (2018, methodology): “The presence of large-scale industries negatively affects entrepreneurship and entrepreneurship culture via several pathways such as (1) institutions that might be tuned to the needs of firms in large-scale industries and not the needs of smaller and younger firms; (2) a lack of entrepreneurial acti”
Six critical questions about smart specialization (2019, background): “…a better economic structure is most often turned into a delusion if one considers: (1) the vested interest groups that need to be incorporated in this process, and (2) the geographical diversity of entrepreneurship in many countries and regions (Fritsch & Storey, 2014; Stuetzer et al., 2016).”
Regional knowledge, entrepreneurial culture, and innovative start-ups over time and space―an empirical investigation (2018, background): “For details see Chinitz (1961) and Stuetzer et al. (2016).”
Personality Traits of Entrepreneurs: A Review of Recent Literature (2018, unknown): “19 Prominent examples include Saxenian (1994), Kenney (2000), Audretsch and Feldman (2003), and Florida (2004), and recent empirical work includes Falck et al. (2011), Audretsch et al. (2012), Glaeser et al. (2015), Stuetzer et al. (2015), Obschonka et al. (2015), and Sorenson (2017).”
Integrating psychological approaches to entrepreneurship: the Entrepreneurial Personality System (EPS) (2017, background): “…using an instrumental variable design indicates that both entrepreneurial behavior and the entrepreneurial Big Five profile share a similar historical root—the region's dominating industry structure during the Industrial Revolution era and subsequent path dependencies (Stuetzer et al. 2016a).”
Entrepreneurial role models, fear of failure, and institutional approval of entrepreneurship: a tale of two regions (2016, background): “In a recent paper Stuetzer et al. (2016) ascribe regional differences in entrepreneurial activity and culture in Great Britain to the long term presence of large-scale industries.”