Nowcasting Entrepreneurship: Urban Third Place versus the Creative Class

Researchers have long debated whether entrepreneurship policy should focus on place or people. In this paper, we extend the place-based versus people-based theories using contemporaneous and geographically granular web-user online activity data to predict a region’s proclivity for entrepreneurship. We compare two theoretical hypotheses: the urban third places—informal gathering locations—that facilitate social interaction and entrepreneurship, in contrast to the creative class which fosters entrepreneurial energy and opportunity in a region. Specifically, we assess whether business formation has a stronger statistical relationship with the browsing behavior of individuals visiting websites associated with third place locations—e.g., restaurants or bars—or the concentration of web browsing behavior associated with “the creative class”. Using U.S. county-level data, we find that both urban third places and the creative class can predict about 70% of the variations in regional business formation, with the creative class having a slight competitive edge.

The COVID-19 Pandemic and Entrepreneurship in Germany

The COVID-19 pandemic severely affected not only incumbent firms, but also the emergence of start-ups. This paper investigates and analyzes the pandemic’s effect on new business formation, as well as business exits and insolvencies, in Germany. We find that the overall level of business registrations slightly decreased during the first year of the pandemic, but that the effect is specific to certain industries. Innovative manufacturing industries and technology-oriented services experienced an increase in the numbers of start-ups. High subsidies and a temporary suspension of important criteria obliging firms to declare insolvency weakened market selection resulting in fewer exits in 2020. The relaxation of insolvency regulations may lead to considerable numbers of ‘zombie’ firms. Generally, the pandemic re-enforced ongoing structural change, but also exerted specific effects that may be temporary in nature.

Unemployment and new firm formation: evidence from Polish industries at the regional level

Research background: The present study takes the regional economics perspective to explaining new firm registrations. It focuses on the driving role of unemployment rate in the process of new business formation. Purpose of the article: The main goal of the study is to investigate the effect of regional unemployment (next to other regional characteristics) on subsequent new business formation in Polish regions for the period 2003?2018. The research hypothesis assumes that a rise in unemployment rate has a positive effect on subsequent new business formation. The positive unemployment push effect is expected to be stronger in operational services. Methods: In order to verify the links between unemployment rates and entrepreneurship, panel data methods (fixed effect Driscoll-Kraay and p-VAR estimators) were applied. The analyses were performed at the industry level (manufacturing, construction, wholesale and retail, hotels and restaurants, and financial services) using regional annual data for the period 2003?2018. Findings & value added: This study provides further insight into the unemployment push hypothesis by distinguishing between industry sectors and by considering regional specificities in post-communist economies (e.g. Poland). The findings provide value for policy-makers regarding the selection of policy instruments intended to stimulate regional development through entrepreneurship in lagged areas.

URBAN HOUSE PRICES AND BUSINESS ESTABLISHMENT IN MALAYSIA: A SECTORAL APPROACH

The purpose of this study is to examine the long-run and short-run relationship between house prices and business formation in various industries. Using data from Malaysian states over the period of 2000–2016 and applying ARDL/PMG models, our results show that changes in house prices have a positive and significant association with business establishment in specific economic sectors, including manufacturing, wholesale and retail trade, information and communication, and financial and insurance in the long-run. However, the long-run relationship between house prices and business formation is negative and significant for electricity, gas, steam and air conditioning supply, construction, transportation and storage, accommodation and food service activities, and real estate industries. The short-run analysis indicates that there is a difference in the responses of business establishment in various industries to the changes in house prices.