Agents of Structural Change : The Role of Firms and Entrepreneurs in Regional Diversification
(2018) In Economic Geography 94(1). p.23-48- Abstract
Who introduces structural change in regional economies: Entrepreneurs or existing firms? And do local or nonlocal establishment founders create most novelty in a region? We develop a theoretical framework that focuses on the roles different agents play in regional transformation. We then apply this framework, using Swedish matched employer–employee data, to determine how novel the activities of new establishments are to a region. Incumbents mainly reinforce a region’s current specialization: incumbent’s growth, decline, and industry switching further align them with the rest of the local economy. The unrelated diversification required for structural change mostly originates via new establishments, especially via those with nonlocal... (More)
Who introduces structural change in regional economies: Entrepreneurs or existing firms? And do local or nonlocal establishment founders create most novelty in a region? We develop a theoretical framework that focuses on the roles different agents play in regional transformation. We then apply this framework, using Swedish matched employer–employee data, to determine how novel the activities of new establishments are to a region. Incumbents mainly reinforce a region’s current specialization: incumbent’s growth, decline, and industry switching further align them with the rest of the local economy. The unrelated diversification required for structural change mostly originates via new establishments, especially via those with nonlocal 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.
(Less)
- author
- Neffke, Frank LU ; Hartog, Matté LU ; Boschma, Ron LU and Henning, Martin LU
- organization
- publishing date
- 2018-01
- type
- Contribution to journal
- publication status
- published
- subject
- in
- Economic Geography
- volume
- 94
- issue
- 1
- pages
- 23 - 48
- publisher
- Economic Geography
- external identifiers
-
- scopus:85037739661
- ISSN
- 0013-0095
- DOI
- 10.1080/00130095.2017.1391691
- language
- English
- LU publication?
- yes
- id
- 30b6a757-37dd-4733-a5df-c438cebf1188
- date added to LUP
- 2018-01-03 13:06:18
- date last changed
- 2023-03-10 10:17:35
@article{30b6a757-37dd-4733-a5df-c438cebf1188,
abstract = {{<p>Who introduces structural change in regional economies: Entrepreneurs or existing firms? And do local or nonlocal establishment founders create most novelty in a region? We develop a theoretical framework that focuses on the roles different agents play in regional transformation. We then apply this framework, using Swedish matched employer–employee data, to determine how novel the activities of new establishments are to a region. Incumbents mainly reinforce a region’s current specialization: incumbent’s growth, decline, and industry switching further align them with the rest of the local economy. The unrelated diversification required for structural change mostly originates via new establishments, especially via those with nonlocal 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.</p>}},
author = {{Neffke, Frank and Hartog, Matté and Boschma, Ron and Henning, Martin}},
issn = {{0013-0095}},
language = {{eng}},
number = {{1}},
pages = {{23--48}},
publisher = {{Economic Geography}},
series = {{Economic Geography}},
title = {{Agents of Structural Change : The Role of Firms and Entrepreneurs in Regional Diversification}},
url = {{http://dx.doi.org/10.1080/00130095.2017.1391691}},
doi = {{10.1080/00130095.2017.1391691}},
volume = {{94}},
year = {{2018}},
}