The Annals of Regional Science

, Volume 55, Issue 1, pp 33–60 | Cite as

Entrepreneurship and economic development in cities

  • David B. Audretsch
  • Maksim Belitski
  • Sameeksha Desai
Special Issue Paper


Policy makers have identified the relationship between entrepreneurship and economic development. Yet, little is known about how this relationship varies over time in cities with different market sizes. This study examines the link between entrepreneurship and economic development using a panel of 127 European cities between 1994 and 2009. We found that the immediate economic development impact of new firm start-ups is positive for both small-/medium-size cities and large cities. The relationship is U-shaped for large cities, with the indirect effect taking 7 years, but the indirect effect does not occur in small-/medium-size cities. We offer useful information for policy makers, practitioners, and scholars.

JEL Classification

L26 M13 O18 R11 R50 



We thank Rolf Sternberg, Taylor Aldridge, Stepan Zemtsov, Frank van Oort, Christoph Alfken, Johan Klaesson, Mikaela Backman, and participants in the “Geography of Innovation and Growth” session at the 17th Uddevalla Symposium in Uddevalla, Sweden (June 12–14, 2014).


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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  • David B. Audretsch
    • 1
  • Maksim Belitski
    • 2
  • Sameeksha Desai
    • 1
  1. 1.Indiana UniversityBloomingtonUSA
  2. 2.Henley Business School, University of ReadingReadingUK

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