New firm formation, spatial trends and economic performance: evidences from Rio Grande do Sul, Brazil
Abstract
The purpose of this paper is to identify spatial regimes or clusters of new firm formation and their relationship with economic growth. With this purpose in mind, a method for estimating the rate of new firm formation was developed based on micro data for 496 municipalities in the state of Rio Grande do Sul. The results suggest the presence of clusters of new firm formation in recent years, unlike what occurred in the middle of last decade. Furthermore, our results show that even in developing country regions the formation of new firms has significantly positive effects on economic growth. The effects are lagged, positive and significant for more developed regions with lower new firm formation rate. In contrast, there is no significant effect for less developed regions with higher new firm formation rate.
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