Creativity, entrepreneurship and economic development: city-level evidence on creativity spillover of entrepreneurship

Abstract

We examine the black box of creativity, entrepreneurship and economic development by asking about the mechanisms through which creativity can influence economic development in cities. We propose that, like the knowledge spillover theory of entrepreneurship, creativity spillovers occur and can be slowed by a creativity filter. We examine how creativity and entrepreneurship, and creativity and a melting pot environment, interact to influence urban economic development. Using data on 187 cities in 15 European countries for the period 1999–2009, we advance the extant literature by providing evidence on the existence and dynamics of a creativity filter.

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Fig. 1
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Notes

  1. 1.

    It is important to note that economic activity may cross core-city boundaries. For example, the “total population” indicator provides the amount of people living within the city, but does not include surrounding communities outside the core city. Therefore a question may arise over whether the surrounding agglomeration zone potentially effects urban economic development within larger urban areas. Later in the paper, we report on a robustness check which we implement in light of the overlap of economic activity between the LAU and large urban zones (LUZ). Leveraging this effect ties to the concept of market potential (Harris 1954).

  2. 2.

    NACE—General Name for Economic Activities in the European Union, and is the European standard for industry classifications, introduced in 1970.

  3. 3.

    This is also known as Bohemians in studies following Florida (2002).

  4. 4.

    Excluding mergers, break-ups, split-offs, restructuring of enterprises, changes of company activity or name.

  5. 5.

    A limitation of this measure is it does not capture firm survival. However, we want to study entrepreneurship as a conduit of creativity, allowing for the transfer of new ideas into marketable innovation; therefore, capturing new businesses which reflect the initial stage of commercialization is adequate for our purposes.

  6. 6.

    UNESCO International Standard Classification of Education (ISCED) facilitates comparisons of education statistics. Tertiary education comprises ISCED levels 5, 6, 7 and 8, which are labelled as short-cycle tertiary, bachelor or equivalent, master or equivalent and doctoral or equivalent, respectively.

  7. 7.

    Pooled OLS allows improvements in efficiency over a simple average approach by year cross-section, as it pools all available data over three time periods.

  8. 8.

    Results suppressed in Tables 4 and 5 to save space.

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Correspondence to Maksim Belitski.

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Belitski, M., Desai, S. Creativity, entrepreneurship and economic development: city-level evidence on creativity spillover of entrepreneurship. J Technol Transf 41, 1354–1376 (2016). https://doi.org/10.1007/s10961-015-9446-3

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Keywords

  • Creativity
  • Spillover
  • Entrepreneurship
  • Melting pot
  • Economic development
  • Urban

JEL Classification

  • L26
  • O10