Regional differences in structural characteristics of start-ups

Authors: Tödtling F.¹; Wanzenböck H.²

Source: Entrepreneurship and Regional Development, Volume 15, Number 4, October-December 2003 , pp. 351-370(20)

Publisher: Routledge, part of the Taylor & Francis Group

Abstract:

In recent years new firm formation has become a major area of both research and policy. Yet, while regional differences in business start-up intensity, and their causes, have been the subject of various studies, few attempts have been made to investigate spatial variation in the structural features of start-ups. Theoretical considerations and the existing literature both suggest that agglomeration advantages and sectoral structure of regions figure prominently among the factors important in influencing start-up activity and characteristics. In the empirical analysis of start-ups in Austria we accordingly apply a regional typology based on these two factors. The data analysed were drawn from two similarly designed surveys relating to the years 1990 and 1997. It is shown that Austria displays marked regional differences in start-up activity, in terms of both intensity and characteristics. In line with the urban incubator hypothesis, tertiary centres - above all the Vienna region - displayed significantly above-average start-up rates, as well as more favourable structural characteristics of the new firms. Start-up activity in old industrial and in rural areas was substantially lower than average, structural features also being less positive there. Furthermore, the 1990 cohort displayed regional differences in business start-ups' survival period, although the Cox model indicated no significant direct influence of area type in this respect. In economic policy terms it can be concluded that, as well as a general improvement in the environment for start-ups, greater regional differentiation of financial, informational and consultancy support is desirable, since not only the conditions for new firm formation but also the intensity and characteristics of start-ups themselves vary considerably between regions.

Keywords: business start-ups; regional differences; structural characteristics; Austria

Document Type: Research article

DOI: http://dx.doi.org/10.1080/0898562032000058923

Affiliations: 1: Department of City and Regional Development, Vienna University of Economics and Business Administration, Rossauerlände 23, A-1090 Wien, Austria;, Email: Franz.Toedtling@wu-wien.ac.at 2: Department of Small Business Management, Vienna University of Economics and Business Administration, Augasse 2-6, A-1090 Wien, Austria

Publication date: 2003-10-01

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