Working Paper No. 195. Elert, Niklas (2012) ”What determines entry? Evidence from Sweden”.
Abstract: In the literature concerning the geography of new rm formation, explanatory variables pertaining to industrial organization and political economy are seldom considered. Such variables were thus included when investigating what conditions inuenced entry of Swedish limited liability rms during 2000-2008, using data that make it possible to trace entry geographically as well as in what industry it occurs down to the ve-digit NACE-level. To deal with overdispersion in the data, a negative binomial regression model was estimated. Political variables, e.g., municipal tax rate and the ideology of local rule, were found to be of limited importance, whereas industry-specic conditions seem to have aected entry. Municipalities with industries with high minimum ecient scale of production or high market concentration rates were considerably less likely to see new rm formation. Substantially more entry occurred in municipalities with high income and a well-educated population.
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