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The Annals of Regional Science

, Volume 59, Issue 1, pp 69–100 | Cite as

Spatial heterogeneity, industry heterogeneity, and entrepreneurship

  • Hien Thu Tran
  • Enrico SantarelliEmail author
Original Paper

Abstract

The prevalence of entrepreneurship varies not only across regions but also among industries. Using a unique panel dataset of 60 two-digit industries across 64 provinces from 2000 to 2010 in Vietnam, we investigate the importance of spatial and sectoral heterogeneity in an analysis of the determinants of entrepreneurship and empirically explore the interaction effect of geographic conditions and industry dynamism. Overall, our results confirm the significance of industry structural variables and their joint effect with geographic conditions in fostering new firm formation. Particularly, (i) growth-driven entries are generally higher in provinces that offer higher salaries; (ii) technology-intensive industries within regions that have strong knowledge spillover effects are appealing to new entries. Others noteworthy findings include: (i) ‘necessity entrepreneurship’ is prevalent in Vietnam, but limited to extractive and service industries that are typically labor intensive; (ii) firms tend to concentrate more in agglomerated locations. This effect, however, evaporates for high-tech industries; and (iii) industry profitability and niche dynamism all play a crucial role in stimulating new start-ups. We apply the system generalized method of moments to obtain empirical evidence in the study.

JEL Classification

R12 L10 O32 O34 

Notes

Acknowledgements

We thank the Editor (Martin Andersson) and two anonymous reviewers for their many helpful suggestions.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2017

Authors and Affiliations

  1. 1.Business SchoolEdge Hill UniversityOrmskirkUK
  2. 2.Department of EconomicsUniversity of BolognaBolognaItaly

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