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The Determinants of New-firm Survival across Regional Economies, by Zoltan J. Acs, Catherine Armington and Ting Zhang, December 2006

Last Updated: August 17, 2007 | Related resource areas: Entrepreneurs & Their Communities

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From SSTI Weekly /digest: The Determinants of New-firm Survival across Regional Economies, by Zoltan J. Acs, Catherine Armington and Ting Zhang, December 2006. 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 period. ftp://papers.mpiew-jena.mpg.de/egp/discussionpapers/2007-04.pdf


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