Abstract
Linear models are developed to determine the relative impact of 15 start-up processes on the annual regional birth rate of new business organizations for all industry sectors in the U.S. over 6 two-year periods. These stable linear models explained from 50–70|X% of the variation in regional firm birth and death rates up to 16 years into the future. Start-up processes that have the most impact involve regional economic diversity; population growth; greater personal wealth; presence of mid-career adults; low unemployment; and greater flexibility in employment relationships. There was a complete absence of any impact of regional variation associated with higher densities of customers, suppliers, workers, R&D resources; costs of production; or access to national transportation facilities.
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The analysis reported is based on data provided by the U.S. Small Business Administration to Regional Economic Development Associates, Incorporated (Edina, Minnesota) in fulfillment of Contract SBA 3067-0A-88 and financial support provided through the University of Minnesota by the Rural Poverty and Resources Program of the Ford Foundation (Grant No. 900-013) and administered by the Aspen Institute. None of the sponsors are responsible for the analysis or the interpretations. Initially presented to the 1992 American Sociological Association Meetings; Pittsburgh, Pennsylvania; 20–24 August 1992. We are indebted to the anonymous journal reviewer for a number of suggestions that improved the manuscript.
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Reynolds, P.D., Miller, B. & Maki, W.R. Explaining regional variation in business births and deaths: U.S. 1976–88. Small Bus Econ 7, 389–407 (1995). https://doi.org/10.1007/BF01302739
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DOI: https://doi.org/10.1007/BF01302739