Historical local industry structure, voting patterns and the long-run entrepreneurial character of regions: Swedish examples

Abstract

Spatial variations in rates of new firm formation are large and spatially persistent over long periods of time. A common explanation of this empirical regularity is so-called local entrepreneurship cultures, which refer to spatially embedded social characteristics that change in slow processes. This paper discusses perspectives on the development of such cultures and focuses on the role of historical industry structures in forming the long-run entrepreneurial character of regions. To illustrate the empirical relevance of arguments and findings in the literature, we use historical data on voting patterns in municipalities in Sweden, as well as indications of their early industrial concentrations, and assess their correlations with present-day entrepreneurial activity. We show that places with a high share of left-wing votes in the period 1917–1948 and early historical presence of heavy industry have lower rates of new firm formation, less positive public attitudes toward entrepreneurship as well as larger average establishment sizes in the twenty-first century. The empirical patterns are consistent with the argument that regions’ historical industry structure is one factor that influences the development of local entrepreneurship cultures.