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Demand pull or supply push? Metro-level analysis of start-ups in the United States
Motoyama, Yasuyuki Malizia, Emil
Motoyama, Yasuyuki
Malizia, Emil
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Abstract
This paper examines factors related to higher regional start-up activity. Two hypotheses are formulated to explain start-ups: the demand-pull hypothesis argues that the amount, growth and density of aggregate demand will stimulate start-ups in any sectors; and the supply-push hypothesis argues that factors including high-tech industry concentrations, patent generation, industrial and university research activities, and government funding will stimulate high-tech start-ups. Both hypotheses support the importance of human capital factors, such as a highly educated or skilled workforce and thick labour markets. The paper incorporates these various measures and employs cross-sectional multivariate analysis of start-up rates in all sectors and in high-tech sectors in 366 metropolitan areas as defined by the US Census Bureau in 2009. Overall, very strong support is found for the demand-pull hypothesis, but only modest support for the supply-push hypothesis, which provide substantial caveats for public policy to promote start-up activities.
Description
Date
2017
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Publisher
Taylor & Francis
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Keywords
Entrepreneurship, Regional development, Innovation, Knowledge spillover
Citation
Motoyama, Y., & Malizia, E. (2017). Demand pull or supply push? Metro-level analysis of start-ups in the United States. Regional Studies, Regional Science, 4(1), 232-246.