Abstract
The purpose of this paper is to apply a modified version of the “income choice” model to explain variations in new-firm formation across Italian provinces over the period 1985–1988. Based on a panel data of startup activity in 78 Italian provinces and using two different data bases, we find support for the overall theory of income choice where individuals choose between earning wages from an incumbent enterprise or else profits from starting a new firm. In particular, the evidence suggests that labor market conditions such as wages and the relative impact of labor dislocation, profits, and environmental factors such as the degree to which entrepreneurial networks already exist, shape the degree to which new firms are started.
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Audretsch, D.B., Vivarelli, M. Determinants of new-firm startups in Italy. Empirica 23, 91–105 (1996). https://doi.org/10.1007/BF00925009
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DOI: https://doi.org/10.1007/BF00925009