Journal Article

Agents of Structural Change: The Role of Firms and Entrepreneurs in Regional Diversification

Boschma, Ron, Hartog, Matté, Henning, Martin, Neffke, Frank

2018

Overview

Who introduces structural change in regional economies: Entrepreneurs or existing firms? And do local or nonlocal establishment founders create most novelty in a region? We develop a theoretical framework that focuses on the roles different agents play in regional transformation. We then apply this framework, using Swedish matched employer-employee data, to determine how novel the activities of new establishments are to a region. Incumbents mainly reinforce a region's current specialization: incumbent's growth, decline, and industry switching further align them with the rest of the local economy. The unrelated diversification required for structural change mostly originates via new establishments, especially via those with nonlocal roots. Interestingly, although entrepreneurs often introduce novel activities to a local economy, when they do so, their ventures have higher failure rates compared to new subsidiaries of existing firms. Consequently, new subsidiaries manage to create longer-lasting change in regions.

• Publisher: Routledge,Clark University,Taylor & Francis Ltd
• Subject: capability bas / capability base / Change agents / Changes / Companies / Diversification / Economic Geography / Ekonomisk geografi / Employers / Entrepreneurs / Entrepreneurship / Failure rates / Founders / Incumbency / Local economy / Novels / Regional development / Regions / relatedness / resource-based view / Samhällsvetenskap / Social and Economic Geography / Social och ekonomisk geografi / Social Sciences / Specialization / Structural change / Subsidiaries / Transformation / Ventures