TY - JOUR AU - Glaeser,Edward L. AU - Kerr,Sari Pekkala AU - Kerr,William R. TI - Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines JF - National Bureau of Economic Research Working Paper Series VL - No. 18333 PY - 2012 Y2 - August 2012 UR - http://www.nber.org/papers/w18333 L1 - http://www.nber.org/papers/w18333.pdf N1 - Author contact info: Edward L. Glaeser Department of Economics 315A Littauer Center Harvard University Cambridge, MA 02138 Tel: 617/495-0575 Fax: 617/495-7730 E-Mail: eglaeser@harvard.edu Sari Kerr Wellesley College 106 Central Street Wellesley, MA 02481 E-Mail: skerr3@wellesley.edu William R. Kerr Harvard Business School Rock Center 212 Soldiers Field Boston, MA 02163 Tel: 617/496-7021 E-Mail: wkerr@hbs.edu M2 - featured in NBER digest on 2012-12-01 AB - Measures of entrepreneurship, such as average establishment size and the prevalence of start-ups, correlate strongly with employment growth across and within metropolitan areas, but the endogeneity of these measures bedevils interpretation. Chinitz (1961) hypothesized that coal mines near Pittsburgh led that city to specialization in industries, like steel, with significant scale economies and that those big firms led to a dearth of entrepreneurial human capital across several generations. We test this idea by looking at the spatial location of past mines across the United States: proximity to historical mining deposits is associated with bigger firms and fewer start-ups in the middle of the 20th century. We use mines as an instrument for our entrepreneurship measures and find a persistent link between entrepreneurship and city employment growth; this connection works primarily through lower employment growth of start-ups in cities that are closer to mines. These effects hold in cold and warm regions alike and in industries that are not directly related to mining, such as trade, finance and services. We use quantile instrumental variable regression techniques and identify mostly homogeneous effects throughout the conditional city growth distribution. ER -