Regions with high start-up activities tend to be seen as dynamic and competitive. If, on the other hand, the number of new start-ups is low, regions are quickly regarded as structurally weak, especially rural regions. Instead of such simplistic conclusions, however, differentiated analyses are required in order to correctly interpret the patterns and importance of regional start-up activities.
Start-up rates sometimes vary considerably, both between countries and between regions. The reasons for this are manifold. The spatially uneven distribution of individuals with entrepreneurial skills plays just as much a role as, for instance, differences in the quality of network relationships or as regards regional and national framework conditions.
Likewise, the economic effects of business start-ups are complex and not always clear. An important determinant is, for example, the nature and degree of competition. While within an effective quality competition start-ups can serve as important drivers of economic development, this is not necessarily the case within a cost-driven predatory competition. Moreover, not every type of business start-up generates benefits for the national or regional economy. This applies in particular to start-ups founded out of necessity, which are set up for lack of suitable employment alternatives and whose growth ambitions are often below-average.
The goal of this project is to identify and to assess central determinants and economic effects of business start-ups within different spatial contexts with special focus on rural areas. The theoretical and empirical findings will then serve as a basis for guidelines for a start-up-friendly economic policy.
In a first step, we employ suitable databases to describe the development of regional and national start-up activities over time. This is followed by a theory-based empirical examination of the underlying determinants. Subsequently, the most important factors from the individual, regional, and national level as well as the interactions between them will be collated and analyzed in detail.
The next step is to scrutinize the impact of business start-ups on their regional economies. In particular, we will examine whether there are distinctive spatial patterns in terms of determinants and economic effects that distinguish rural from non-rural areas and thus might require differentiated economic policy strategies.
The empirical design of the project includes in particular quantitative methods. Depending on the respective research question, time series and/or multi-level analyses as well as spatial econometric methods will be applied. Throughout this process, literature analyses and potential case studies will accompany, complement and deepen the quantitative findings.
6.2018 - 5.2022
Project status: ongoing