Regional entrepreneurship capital, spillovers and productivity

Resumen

The Knowledge Spillover Theory of Entrepreneurship (KSTE) suggests that Entrepreneurship Capital in a region has positive spillovers that increase the production of firms in this region (Audretsch and Keilbach 2005, 2007; Acs et al. 2009; Audretsch and Lehmann 2016). A growing amount of literature is estimating the effects of Regional Entrepreneurship Capital on a region’s production using aggregated data at the regional level (Audretsch and Keilbach 2004a,b,c, 2005, 2008; Mueller 2006, 2007). These studies report the positive and significant effects of Regional Entrepreneurship Capital on regional production, which are interpreted as supporting the existence of positive spillovers on firms’ productivity. This thesis deals with three gaps that the cited empirical literature has in order to measure such externalities. Chapter 1 states the assumptions that one have to make in order to interpret the existing evidence as a support of the presence of positive spillovers of the regional Entrepreneurship Capital on the firms’ productivity. A key assumption is the existence of constant returns to scale which is inconsistent with the fact that in practically all the empirical applications are decreasing returns to scale. This Chapter shows how to deal with this inconsistences using aggregated data at the regional level. For doing that, it is necessary to include in the estimations the number of firms in the region. The idea is to estimate a representative production function of the firms in the region without imposing restrictions about the returns to scale. Given that it is expected a certain correlation between the number of firms and the Regional Entrepreneurship Capital, it is important to provide evidence when the number of firms is included in the estimations. Chapter 1 fills this gap providing evidence using a sample of 52 Spanish provinces over eleven years. The results suggests that the previous literature could have overestimated the spillovers of Regional Entrepreneurship Capital on firms’ production. A second gap is that those externalities have not been measured at the firm level. Data at the firm level has two advantages. First, let us to provide evidence related with the kind of firms that benefit most from the spillovers. Second, the Regional Entrepreneurship Capital could affect the regional aggregated production by at least two means: by affecting the number of firms in the region and/or by the spillovers in firm production. With aggregated data it is practically impossible to distinguish among them. This will not be the case when data at the firm level are used. Chapter 2 covers this gap providing evidence from a sample of 11,276 Spanish firms during the 2004–2012 period. The Entrepreneurship Capital is measured at the level of Autonomous Comunities. Positive spillovers are estimated in between effects models, but such spillovers are only found in technological firms when within effects models have been estimated. Thus, the Regional Entrepreneurship Capital spillovers are unclear when data at the firm level are used. The third gap is the lack of evidence about the Regional Entrepreneurship Capital spillovers on firms’ production at the City level. Chapter 3 takes advantage of the Ecuadorian census of establishments carried out in 2010 and uses data disaggregated at the firm level (445,490 establishments). Furthermore, this is the first study analyzing the spillovers of Regional Entrepreneurship Capital in a Latin American country. A distinctive feature in this case, is the role of the informal economy. We can provide evidence related with the spillovers of the informal Entrepreneurship Capital. In general, the Entrepreneurship Capital accumulated in a city has positive spillovers over the production of the establishments. Those spillovers are higher in those cities where the Entrepreneurship Capital is mostly generating informal establishments.