Local production systems entrepreneurship and regional development theoretical arguments and empirical evidence from Argentina

ROCHA, H., REYNOLDS, PD, DONATO, V, HAEDO, C.

Congreso; BAbson Kauffman entrepreneurship reaseach conference; 2004

This paper is about the impact of different types of local production systems on entrepreneurship and regional development. This topic is especially relevant in Latin American countries, which after two decades of macroeconomic liberalisation reforms face the opportunity to develop local development strategies through the creation of conditions to foster entrepreneurship and development. However, although the increasing interest on regional factors affecting founding rates, research on entrepreneurship at the regional level is still scarce. Additionally, there are a variety of local production systems such as industrial districts, industrial agglomerations, and regional clusters that imply different causal mechanisms to foster entrepreneurship and regional development. Finally, to uncover the different causal mechanism that trigger entrepreneurship and regional development it is necessary to make comparisons within and not within local production systems. Studies just focussing on new firms within local production systems do not allow assessing the real impact of those systems because there is no information about the impact of similar firms locate outside local production systems. This paper contributes to this research agenda providing a theoretical model and an empirical research design to analyse the impact of different local production systems on firm birth and regional development. The paper aims at answering three research questions. First, is the firm birth rate within local production systems higher than that not within local production systems? Second, are there significant differences in firm birth rate across different local production systems such as industrial agglomerations and industrial districts? Third, do local production systems have a moderating impact on the relationship between firm birth rate and regional development? Fourth, what are the implications of the answer to the previous questions for academics and policy makers?