The nature of local knowledge and new firm formation

Abstract

Knowledge spillovers in a region often co-vary with the size of knowledge created in the region, i.e. local knowledge. Local knowledge is, however, open to competition between incumbents and new entrants. Given this competition, the size of local knowledge is not always conductive to new entrants. This study examines which types of local knowledge may increase the potential for knowledge spillovers, and eventually entrepreneurial activities.