Infrastructure and Entrepreneurship

This paper is one of the first studies to examine the link between infrastructure and entrepreneurship. Because infrastructure can enhance connectivity and linkages that facilitate the recognition of entrepreneurial opportunities and the ability of entrepreneurs to actualize those opportunities, a hypothesis is developed suggesting that startup activity is enhanced by infrastructure. However, not all types of infrastructure have a homogeneous impact on the entrepreneurial decision, so that a second hypothesis is developed suggesting that certain types of infrastructure which facilitate connectivity and linkages among people are more conducive to startup activity. The empirical results suggest that startup activity is positively linked to infrastructure in general, but that certain specific types of infrastructure, such as broadband are more conducive to infrastructure than are highways and railroads. Finally, we hypothesize that the types of infrastructure have varying influences in different sectors. Our empirical analyses support this view and we conclude that particular infrastructure policies can be used to facilitate regional startup activities and, furthermore, to foster startup activities in desired industries.

Audretsch, David B., Diana Heger and Tobias Veith (2015), Infrastructure and Entrepreneurship, Small Business Economics 44(2) , 219-230