Start-up rates, entrepreneurship culture and the business cycle: Swedish patterns from national and regional data

Abstract

It is often claimed that there are locally embedded values and attitudes towards entrepreneurship, exerting a strong influence on the rate and level of entrepreneurial activity in regions. The concept of regional entrepreneurship culture aims to capture such phenomena, and refers in a general sense to the level of social acceptance and encouragement of entrepreneurs and their activities in a region. This chapter discusses regional entrepreneurship culture as a source of persistent differences in regional rates of new firm formation, and presents a number of empirical regularities for Sweden to illustrate the empirical relevance of the main arguments. Using data on rates of new firm formation across Swedish regions over time, the chapter further explores the association between start-up activity and the business cycle, as well as how the geographic distribution of start-up rates changes during a major economic crisis.