Abstract
This paper proposes a conceptual framework in which a historical cultural environment based on scientific knowledge and creativity is an important driver of long-term regional entrepreneurship and innovation. These two factors, in turn, foster the growth of regions. This framework is empirically tested in Italy using current and historical data at the NUTS 3 geographical level and applying structural equation modeling to a system of three equations. The empirical evidence supports the conceptual framework and shows that the cultural environment has an indirect effect on regional growth through entrepreneurship and innovation. Historical scientific knowledge, proxied by the presence of universities, and past creativity, proxied by the presence of scientists and inventors in the area, positively affect long-term regional entrepreneurship and innovation. Regions with higher levels of entrepreneurship and innovation grow faster than other regions. Lastly, entrepreneurship plays a crucial role by also strengthening the positive impact of innovation on growth.
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Notes
The concept of new combinations of productive means has five different possibilities: (1) the introduction of new goods or a new quality of goods; (2) the introduction of a new method of production; (3) the opening of a new market; (4) the conquest of a new source of supply or of half-manufactured goods, irrespective of whether these sources already exist or are new; and (5) a new organization of any industry, such as the creation of a monopoly position or the breaking up of a monopoly position (Schumpeter 1934, p. 66).
The term “creative destruction” was coined by Schumpeter (1942) to emphasize the role of innovation in economic development.
This view of entrepreneurship can be considered the first entrepreneurship theory of Schumpeter. In later studies, Schumpeter outlined a second entrepreneurship theory, which is basically less “individualistic.” In this second theory, entrepreneurs are not necessarily people, and countries and agendas could also act as entrepreneurs.
Some studies have proxied regional innovation by using composite indicators, commonly including patent data (Crescenzi 2005).
In addition, our model does not include investment in the growth equation because other variables operate, at least in part, through factor accumulation.
Data on the number of universities and their year of foundation are from Wikidata. Information on the number of students came from the Annali di statistica, Statistica dell’Istruzione Superiore nell’anno accademico 1926–1927.
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Acknowledgments
We are grateful to the participants of the Conference on Culture, Institutions and Economic Development, University of Basilicata, and the Conference on Rethinking Culture and Creativity in the Technological Era, University of Florence, for useful discussions. We also thank the associate editor and three anonymous reviewers for helpful comments.
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Del Monte, A., Moccia, S. & Pennacchio, L. Regional entrepreneurship and innovation: historical roots and the impact on the growth of regions. Small Bus Econ 58, 451–473 (2022). https://doi.org/10.1007/s11187-020-00425-w
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DOI: https://doi.org/10.1007/s11187-020-00425-w