Start-ups and Local Entrepreneurial Social Capital in the Municipalities of Sweden

Abstract

Westlund H., Larsson J. P. and Olsson A. R. Start-ups and local entrepreneurial social capital in the municipalities of Sweden, Regional Studies. This paper contains one of the first empirical attempts to investigate the influence of local entrepreneurial social capital (ESC) on start-up propensity. A unique database, including not only total start-ups but also data on start-ups divided into six sectors, is used to study the impact of ESC on start-ups per capita. The results support the hypothesis that social capital, measured both as (1) firm perception of local public attitudes to entrepreneurship and (2) the share of small businesses influences start-up propensity in Swedish municipalities. The findings also support previous results suggesting that social capital has a somewhat stronger influence in rural areas than in urban areas.