An extensive body of research has demonstrated that firm founding rates vary systematically across subnational regions. However, comparatively little research exists on whether new venture performance, post founding, is similarly impacted by locational factors. We implement a variance decomposition analysis to examine the impact that geographic region has on new venture growth, across a comprehensive sample of 3,893 venture-backed startups located in 139 US Metropolitan State Areas (MSAs), and operating in 59 industry sectors over the period 1980-2012. Our results suggest that the “region effect” is particularly important for firms that a) are at the earliest stages of business development and b) operate in industries where employees require a high level of general human capital.
Vedula, Siddharth and Doblinger, Claudia
"THE IMPACT OF SUBNATIONAL REGION ON THE GROWTH OF NEW VENTURES: EMPIRICAL EVIDENCE FROM US VENTURE-BACKED FIRMS,"
Frontiers of Entrepreneurship Research: Vol. 34
, Article 2.
Available at: http://digitalknowledge.babson.edu/fer/vol34/iss14/2