State-level determinants of entrepreneurship and a preliminary measure of entrepreneurial climate

Stephan J. Goetz, David Freshwater

Research output: Contribution to journalArticle

53 Citations (Scopus)

Abstract

State and local governments increasingly look to entrepreneurship as a means of stimulating economic growth. However, can the public sector play a role in promoting entrepreneurial activity - and if so, what should that role be? The authors investigate independent effects of financial and human entrepreneurial capital and ideas on entrepreneurial activity in the 50 states. Financial entrepreneurial capital has an inverse U-shaped relationship with entrepreneurial activity, suggesting there are limits to using increasing amounts of financial capital to stimulate entrepreneurship, all else being equal. The authors rank each state in terms of predicted and actual entrepreneurial activity scores and propose a preliminary measure of the entrepreneurial "climate" of each state. Although most states are ranked near where casual analysis might place them, the authors find that others have predicted values that differ significantly from actual values. This suggests that climate may be an important factor in stimulating entrepreneurial activity.

Original languageEnglish (US)
Pages (from-to)58-70
Number of pages13
JournalEconomic Development Quarterly
Volume15
Issue number1
DOIs
StatePublished - Jan 1 2001

Fingerprint

entrepreneurship
climate
determinants
human capital
public sector
local government
economic growth
finance
Entrepreneurial activity
Entrepreneurship
Climate
Values
effect
analysis

All Science Journal Classification (ASJC) codes

  • Development
  • Economics and Econometrics
  • Urban Studies

Cite this

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State-level determinants of entrepreneurship and a preliminary measure of entrepreneurial climate. / Goetz, Stephan J.; Freshwater, David.

In: Economic Development Quarterly, Vol. 15, No. 1, 01.01.2001, p. 58-70.

Research output: Contribution to journalArticle

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