LAUSR

We investigate persistence and change of regional new business formation in West Germany over a period of 30 years. Our indicator is the position of a region in the national ranking. We confirm the role of several sources of this persistence, namely, persistence in regional determinants of new business formation and path dependence in new business formation activity. The results for the role of a distinct regional culture of entrepreneurship are, however, ambiguous. Main factors that are related to changes in the national ranking are the employment share in small businesses, the share of manufacturing employment and a relatively low regional wage level. R&D activities are also conducive for new business formation but become effective only with a time lag.