In this project, the Principal Investigator will analyze the relationship between entrepreneurship and market access, seeking to shed light on the effects of economic context on entrepreneurship and, in turn, entrepreneurship on local economic growth. The study takes advantage of the variation in market access brought about by the U.S.-Canada Free Trade Agreement (FTA): border regions should experience an increase in their local market size after the FTA, compared to other interior regions farther from the border. The methods include a difference-in-differences analysis, testing whether entrepreneurial activity grew more in border regions than in areas farther from the border from before to after the FTA. They also involve a spatial econometric analysis methodology, which is new to the entrepreneurship literature, developed specifically for this context that will allow researchers to integrate detailed spatial micro-data in the U.S. with coarser aggregated data from Canada.
In terms of broader impacts, this research should shed light on which factors of local economic activity (such as the availability of local financing, skilled workforce, potential customers, and suppliers) have the most important effects on economic growth and development. Thus, the findings should be valuable to policy makers with responsibility for economic conditions. In addition, the project will develop, document, and disseminate the tools needed for similar future spatial econometric research, including a new dataset linking individual-level, entrepreneur specific information with the Census establishment-level universe files. While this study focuses on economic data, the research methodology and tools developed should be useful to other scholars show are engaged with related management and economics topics.
