Effects of Regional Human Capital Structure on Business Entry: A Comparison of Independent Startups and New Subsidiaries in Different Industries

This paper aims to investigate the regional determinants of entry with special attention to the effects of regional human capital, using prefecture-level data from Japan. On the basis of some recent studies in the field, we investigate the effects of several regional factors on business entry, distinguishing between independent startups and new subsidiaries of existing firms on the one hand, and comparing different sectors on the other. Using pooled regional data at the prefecture level for our periods between 1996 and 2006, we estimate the impact of various regional factors, including human capital structure, on the number of independent startups and new subsidiaries for each industry sector, simultaneously. Estimation results demonstrate considerable differences between independent startups and subsidiaries as well as among different industry sectors with regard to the impact of regional human capital structure on business entry. First, the entry of independent startups in the manufacturing sector is positively related with regional human capital. Second, in contrast to our hypothesis, we found a positive relationship between regional human capital structure and the entry of new subsidiaries in the service sector. Third, the regional human capital structure is more important for regional entrepreneurship in more technology-intensive (high-tech) service industries. Considering the possible implications, we suggest that the regional policy to activate business startups should focus more on the differences between encouraging local entrepreneurship and attracting new subsidiaries, and recognize that these differences may vary even within the service sector, depending on what type of human capital is required.entry, region, independent startup, subsidiary, entrepreneurial human capital

The Median Voter and the Median Consumer: Local Private Goods and Residential Sorting

When a product's product provision entails fixed costs, it will be made available only if a sufficient number of people want it. Some products are produced and consumed locally, so that provision requires not only a large group favoring the product but a large number nearby. Just as one has an incentive to sort into community whose median voter shares his preferences for local public goods, product markets may provide an analogous incentive to sort into a community whose consumers tend to share his preferences in private goods. Using zip code level data on chain restaurants and restaurants overall, this paper documents how the mix of locally available restaurants responds to the local mix of consumers, with three findings. First, based on survey data on chain restaurant patronage, restaurant preferences differ substantially by race and education. Second, there is a strong relationship between restaurants and population at the zip code level, suggesting that restaurants%u2019 geographic markets are small. Finally, the mix of locally available chain restaurants is sensitive to the zipcode demographic mix by race and by education. Hence, differentiated product markets provide a benefit -- proximity to preferred restaurants -- to persons in geographic markets whose customers tend to share their preferences.

Product Quality and Market Size

Recent literature notes that when quality is produced with fixed costs, a high quality firm can undercut its rival's prices and may find it profitable to invest more in quality as market size grows large. As a result, a market can remain concentrated even as it grows large. When quality is produced with variable costs, by contrast, a wide range of product qualities can coexist in the market because they are offered at different prices. Larger markets will fragment and offer products with a wider range of qualities. Using US urban areas as markets, we examine the relationships between market size and product quality - and between market size and product concentration - for two industries that differ in their quality production process. We document that in the restaurants industry, where quality is produced largely with variable costs, the range of qualities on offer increases in market size, with each product maintaining a small market share. In daily newspapers, where quality is produced with fixed costs, the average quality of products increases with market size, and the market does not fragment as it grows large.

Determinants of new firm formation in Japan: A comparison of the manufacturing and service sectors

This paper analyzes the determinants of regional variations in new firm formation by industry, using the data of 47 prefectures in Japan. The results of this paper reveal the following evidences: (1) market access is the factor that promotes new firm formation in all industries, though the impact on new firm formation is greater in the service sectors than in the manufacturing sectors (2) the industrial agglomeration contributes to stimulating new firm formation in the manufacturing sectors and (3) while average wage is an important factor in the manufacturing sectors, it is not significant in the service sectors.

Organisational ecology in tourism: A regional labour market perspective

Tourism is often claimed to be a major employment creator and a viable path to development in rural areas. Covering the period 1980-1994, Danish data of the overall growth in the number of enterprises and jobs support the optimism forwarded, except for the most densely populated areas. The paper goes into greater depth of the dynamics of regional tourism development by investigating organisational birth, survival and mortality among restaurants and accommodation facilities. The study of the organisational ecology unveils a considerable turbulence, e.g. high numbers of entries as well as exits. Stability tends to correlate positively with agglomeration. In some - but not all - respects, a higher stability among the enterprises in urban areas results in qualitatively different and more permanent types of employment.

Coordination Failures, Cluster Theory and Entrepreneurship: A Critical View

Development policy has been energized in the last decades by a number of contributions emphasizing a new positive role the state can and should play in fostering economic growth. The central pillar of this literature is Michael Porter and his theory of clusters. This paper intends to provide a refutation of the idea that coordination failures as manifested in the inability of clusters to emerge can serve as a ground for government intervention. It uses mainly Porter, Rodrik and Rodriguez-Clare thesis as an example of this approach and criticizes the claim that coordination externalities prevent the market process to allocate resources optimallycoordination failure, cluster theory, development economics

Coordination Failures, Cluster Theory and Entrepreneurship: A Critical View

Development policy has been energized in the last decades by a number of contributions emphasizing a new positive role the state can and should play in fostering economic growth. The central pillar of this literature is Michael Porter and his theory of clusters. A number of economists have attempted to anchor the appetite for clustering initiatives in a solid theoretical bedrock. They have pointed out an interesting market failure that may prevent the emergence of profitable clusters and thus jeopardize overall economic development: the failure of individuals to coordinate changes in their actions in order to reap the benefits of a better situation. This paper intends to provide a refutation of the idea that coordination failures as manifested in the inability of clusters to emerge can serve as a ground for government intervention. It uses mainly Porter, Rodrik and Rodriguez-Clare thesis as an example of this approach and criticizes the claim that coordination externalities prevent the market process to allocate resources optimally.Coordination, Market failure, Economic development

The creative industrial park : formation path and evolution mechanism

This paper has built a three-stage assumption of creative industrial park on the base of evolutionary economics, which are the gather of units, the construction of interface and the development of network. The gather of units is a reflection of resource search, the construction of interface is a need of identity, and the development of network is a result of multi-dimensional expansion.In the three-stage evolution, the creative industrial park increases constantly their evolution level from the simple geographic gathered to the division and cooperation of labor, until the formation of novel systems. Then this paper analyzes the 798 creative industrial park using the three-stage assumption. This paper finds the main problem of 798’s self-destructing after the low level development of the third stage is the exclusion of the commercial prosperity to the art production. Accordingly,the paper puts forword four modes of promoting the integration between art and commerce. At last, this paper argues the different characteristics of the creative industrial park from other industrial parks. On the angle of formation path, the essence of creative industries is integration of culture and economy, technology. On the angle of evolution mechanism, it reflects novel characteristic of unit, identity characteristic of interface, and co-creation characteristic of network.creative industrial park; formation path; evolution mechanism; integration of culture,economy,and technology

Small scale economic differentiation – A multi-level analysis with indirect closure

We want to isolate systematically differing small-scale agglomeration-patterns, which indicate different types of competition between localities. We apply a technique of indirect closure based on the differing observed relation between local business tax-rate and tax-revenue and use a mixed multi-level model in order to cope with local dependencies on different scales. Thereby it is shown that small-scale agglomeration effects, i.e. differing development potentials of similar municipalities, are at least partially determined by settlement characteristics, geographical relative position and industry structure. Since these influences interact in various ways the observed patterns are very complex. It is due to small-scale “agglomeration-effectsâ€, defined here as a positive observed relation between tax-rate and tax-revenue, that municipalities of the same type may nevertheless have different potentials in economic development. On the other hand, a high mobility of firms in a dynamic environment strengthens the competition-effect as indicated by a negative relation between tax-rate and tax-revenue. Under such circumstances municipalities will strive for convergence. In empirical studies comparing regional developments on various geographical scales these heterogeneous relations will have to be taken into account in order to reach generalisable conclusions. we also conclude that regional economic policy cannot apply identical concepts independently of the wider economic environment. Instead it has to react to the differing endogenous potentials of localities for economic development.