Under the “Knowledge Spillover Theory of Entrepreneurship”, urbanization economies rather than localization economies are considered the driving force for new venture creation (Jacobs, 1969; Audretsch & Feldman, 1996). Furthermore, diversified urban areasresultssuitable location for new ventures compared with industry-specialized and less urbanized areas (Handerson, 1995; Porter, 1999).

Localization of new ventures may also show some form of “path dependency” (Fotopoulos, 2014). Thus, geographical areas with relatively high rates of new venture creation in the past – such as Italian industrial district area (IDs) - are likely to show high rates of startups in the future (Fritsch & Mueller, 2006; Hathaway, 2013). In addition, business support and incubating initiatives i.e. incubators and science parks may foster entrepreneurship (Ratinho & Henriques, 2010).