Abstract

Regional economic growth literature has established that differences in regional productivity can to large extent be explained by the density of economic activity. This effect of ‘urbanization economies’ has been documented for regions in the United States (Ciccone and Hall 1996) and Europe (Ciccone 2002). Many studies have since contributed to ‘opening’ the black box of urbanization economies (Duranton and Puga 2004; Rosenthal and Strange 2004). Consistent with recent literature (Acs et al. 2004) we argue that entrepreneurship constitutes a relevant additional explanatory factor for observed regional variation in labor productivity. Moreover we argue that specific types of entrepreneurship can be related to urbanization effects. The need for identifying specific types of entrepreneurship requires the inclusion of the individual as the unit of analysis.

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