High-growth entrepreneurship in a developing country: Regional systems or stochastic process?

Abstract

High-growth entrepreneurship represents a key socioeconomic phenomenon that is expected to spur aggregate levels of innovation and competitiveness. Since its impacts are mainly felt at the regional level, the concept of Regional Systems of Entrepreneurship becomes central to this debate. While several approaches have dealt with this issue in the context of developed economies, assessments of developing nations are still scarce. This research addresses this situation by investigating the determinants of entrepreneurial activity in Brazilian states. Econometric estimations and cluster analysis comprehend data from gazelle firms in Brazilian states throughout the period 2008-2014. Findings allow identifying the existence of relevant agglomeration diseconomies and an overall lack of connection between the knowledge infrastructure and entrepreneurial activity. These conditions suggest that Brazil has incipient Regional Systems of Entrepreneurship and that the geographic dynamics of entrepreneurial activity in this country is remarkably different from what has been observed in developed countries in general.