STOCKHOLM SCHOOL OF ECONOMICS Department of Economics Bachelor´s Thesis – Course 659 Spring 2013 Working for the Man A cross-sectional study of single industry towns’ effect on entrepreneurship Malin Adeborgф and Martin Siltbergψ Abstract Over the last decades, the once prominent single industry towns have gained an unfortunate status as myopic and conformist communities with an adverse entrepreneurial climate. Although the rich history and the economic transitions of single industry towns are well documented in research, limited effort has been made to empirically establish the towns’ assumed negative relationship with entrepreneurship. Building upon this notion, we use econometric methods to investigate if this perception is applicable to single industry towns in modern Sweden. By using data on a municipal level, we find a significant and negative relationship between single industry towns and entrepreneurship. The results are supported through an instrumental variable approach. Even though the risk of omitted variables prevents us from inferring a causal relationship, we conclude that single industry towns have a systematic and negative relationship with entrepreneurship. Key words: Single industry towns, entrepreneurship, regional growth, geographical economics JEL codes: R11, L11, L26, O14 Tutor: Erik Meyersson Examiner: Yoichi Sugita Discussants: Linn Sjöblom and Katarina Sandberg Presentation: June 7, 2013 ф
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[email protected] 1 Acknowledgment We would like to thank out tutor Erik Meyersson, at the Stockholm Institute of Transition Economics at the Stockholm School of Economics, for valuable support. We also thank Örjan Sjöberg, Professor at the Department of Economics at the Stockholm School of Economics, for inspiration and guidance.