Regional variation of new firm formation: the Norwegian case

Abstract

During recent years studies on regional variation of new firm formation have been undertaken in a number of countries. This article contributes with an analysis of Norway. Based on data on new establishments obtained from Statistics Norway, which cover most of the private sector, start-ups during the years 1988–92 are analysed. In total, about 88,000 start-ups were recorded in this period. When dividing the country into 104 different regions, simcant variation in start-up rates are revealed. The pattern of regional variation differs for various industries. When correlation and regression analysis have been performed, models explaining significant parts of variation in start-up rates are revealed. The results point to the conclusion that the existing industrial structure provides the most significant explanation of regional variations, i.e. business density, proportion of smlall firms and the level of sectoral concentration of industry are the most important factors. There also seems to be a centre-periphery dimension working, but when explicitly tested for this dimension, only smaller parts of the variation are explained.