Premium
Explaining Regional Variations in Entrepreneurship as Multiple Occupational Equilibria *
Author(s) -
Parker Simon C.
Publication year - 2005
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.0022-4146.2005.00394.x
Subject(s) - entrepreneurship , human capital , productivity , economics , capital (architecture) , labour economics , economic geography , economic system , macroeconomics , economic growth , finance , geography , archaeology
. The paper proposes a human capital‐based model of choice between paid employment and entrepreneurship that can give rise to multiple equilibria in occupational structure. The model is consistent with evidence of pronounced, persistent, and hitherto unexplained regional variations in entrepreneurship. Whether multiple equilibria emerge is shown to depend on the occupation‐specific productivity of human capital and the costs of human and financial capital. The paper goes on to discuss the implications for governments seeking to promote entrepreneurship as a tool of regional development policy.