Spatial drivers of firm entry in Iran
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Spatial drivers of firm entry in Iran Iman Cheratian1 · Saleh Goltabar1 · Carla Daniela Calá2 Received: 3 April 2019 / Accepted: 11 September 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract Given the importance of entry promotion to prompt economic growth and promote structural transformation, this paper investigates the regional determinants of firm entry in the 30 Iranian regions, considering four different sizes—micro, small, medium, and large—over 2000–2015. Using a new and unique database, we estimate different spatial econometric models, which take into account three types of spatial interaction effects. We find that firm entry is related to some regional characteristics, but the relationship is not homogeneous across firms of different size. We also find that most types of firms are influenced by the negative effect of economic sanctions during the sample period. JEL Classification M13 · O18 · L26
1 Introduction In recent decades, there has been a quick expansion on the study of regional determinants of firm creation in economic geography and growth literature. Since entrepreneurship capital is considered as a key factor to prompt economic growth, national, and regional policymakers in different countries wonder how to boost firm birth, especially at the regional level (Fritsch and Mueller 2004, 2008); Van Stel and Suddle 2008; Von Graevenitz et al. 2010; Dejardin 2011; Fritsch 2013). Firm entry promotion is particularly relevant in developing countries, since startups not only enhance economic growth, but also promote structural transformation by absorbing labor from traditional sectors, provide innovative inputs, promote specialization, raise productivity (Gries and Naudé 2010), and lead to gap-filling and input-completing activities (Acs and Amorós 2008). Moreover, start-ups also allow * Iman Cheratian [email protected] 1
Economics Research Group, Academic Center for Education, Culture, and Research (ACECR) on Tarbiat Modares University, Jalal Ale Ahmad Highway, P.O. Box 14115‑111, Tehran, Iran
2
Facultad de Ciencias Económicas y Sociales, Universidad Nacional de Mar del Plata, Funes 3250, 7600 Mar del Plata, Argentina
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to commercialize innovations (Audretsch et al. 2006) and discover a country´s competitive advantages (Hausmann and Rodrik 2003). Despite its relevance, firm formation in developing countries has been barely studied, in comparison with the attention that it has received in developed and industrialized economies. This paper aims to contribute to the empirical literature on the role of regional factors on firm dynamics in developing countries, by identifying the regional factors associated to firm entry across Iranian provinces over the period 2000–2015. This is, to our knowledge, the first attempt to investigate regional-level firm entry in the Iranian provinces. This paper also adds some other major contributions to the existing literature. Most of the previous studies in developing countries do not take
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