Agents of structural change: The role of firms and entrepreneurs in regional diversification
Agents of structural change
The role of firms and entrepreneurs in regional diversification
Frank Neffke, Matté Hartog, Ron Boschma, Martin Henning
F. Neffke: Harvard Kennedy School, Harvard University, M. Hartog: Harvard Kennedy School, Harvard University, R. Boschma: CIRCLE, Lund University and Urban and Regional research center Utrecht, Utrecht University, M. Henning: University of Gothenburg and Lund University.
Abstract
Who introduces structural change in regional economies: Entrepreneurs or existing firms? And do local or non-local establishment founders create most novelty in a region? Using Swedish matched employer-employee data, we determine how novel the activities of new establishments are to a region. Incumbents mainly reinforce a region’s current specialization. Their growth, decline and industry switching further align incumbents with the rest of the local economy. The unrelated diversification required for structural change mostly originates via new establishments, especially via those with non-local roots. Interestingly, although entrepreneurs often introduce novel activities to a local economy, when they do so, their ventures have higher failure rates compared to new subsidiaries of existing firms.
Consequently, new subsidiaries manage to create longer-lasting change in regions.
Key words: Structural change, entrepreneurship, diversification, relatedness, regions, resource-based view
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Ron Boschma is Full Professor in Innovation Studies at Lund University in Sweden, and director of the Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE) at Lund University since 2013. He is also Full Professor in Regional Economics at the Department of Economic Geography at the Faculty of Geosciences, University of Utrecht since 2005 and guest professors at the universities of Toulouse, Cagliari and Nice. He received a PhD degree in Economics at the Tinbergen Institute, Faculty of Economics and Econometrics, Erasmus University Rotterdam in 1994.
His research concentrates on working out conceptually and empirically Evolutionary Economic Geography. Boschma has published in international journals on the spatial evolution of industries, the geography of innovation, proximity and innovation, the structure and evolution of spatial networks, regional diversification, and agglomeration externalities and regional growth. He is also Associate Editor of Regional Studies and Industrial and Corporate Change, and member of the Editorial Board of Economic Geography and Review of Regional Research (Jahrbuch für Regionalwissenschaft).
Ron has done research assignments for organizations like the Dutch Ministry of Economic Affairs, the Dutch Ministry of Education, Culture and Science, the European Commission DG Research, the European Science Foundation, the OECD, the Scientific Council for National Government in the Netherlands (WRR), and the Monti national government in Italy. He has acquired research grants from the Dutch Scientific Council (NWO), EU Framework programs, the European Science Foundation, among other funding agencies.
Home page: http://econ.geo.uu.nl/boschma/boschma.html