Explaining regional variations in entrepreneurship as multiple equilibria

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46 Citations (Scopus)


The paper proposes a human capital-based model of choice between paid employment and entrepreneurship that can give rise to multiple equilibria in occupational structure. The model is consistent with evidence of pronounced, persistent, and hitherto unexplained regional variations in entrepreneurship. Whether multiple equilibria emerge is shown to depend on the occupation-specific productivity of human capital and the costs of human and financial capital. The paper goes on to discuss the implications for governments seeking to promote entrepreneurship as a tool of regional development policy.
Original languageEnglish
Pages (from-to)829-850
Number of pages22
JournalJournal of Regional Science
Issue number4
Early online date18 Oct 2005
Publication statusPublished - Nov 2005


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